A cap on the amount of the payable research and development (R&D) tax credits for small and medium-sized enterprises (SMEs) comes into force for accounting periods beginning on or after 1 April 2021.
The cap limits the amount of payable R&D tax credit that an SME can claim to £20,000 plus 300% of its total PAYE and national insurance contributions liability for the period.
The cap does not apply to those companies who:
• Have employees creating, preparing to create or managing intellectual property; and
• Do not spend more than 15% of their qualifying R&D expenditure on subcontracting R&D to, or the provision of externally provided workers by, connected persons.