R&D Allowances for CAPEX

Capital expenditure does not qualify for R&D Tax Relief.

 

However, assets used for R&D may qualify for a special form of capital allowances - Research & Development Allowances (RDAs).

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The RDA is an immediate 100% allowance that writes-off your full qualifying cost against corporation tax in the year of spend.

 

The RDA is available in addition to the 100% Annual Investment Allowance (AIA), which is a separate allowance available for all qualifying plant and machinery.

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There are two important differences between the RDA and the AIA that can make the RDA very valuable:-

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1. Whereas the AIA is limited to £1,000,000 of capital expenditure per annum, the RDA is unlimited.  

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2. Furthermore, whereas buildings which form the structure within which a trade is undertaken do not generally qualify for the AIA, they may qualify for RDAs.

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At tax4tech we can review your expenditure and help you claim your RDAs. Contact us today to arrange a free initial meeting.

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