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What are the 7 steps to apply for the R&D Expenditure Credit (RDEC)?

HMRC lays out the steps on the government website here, but we’ll try to explain it more concisely.

  • Step 1: The credit is used to create an agreement of what your corporation tax liability is
  • Step 2: Any remaining R&D expenditure credit is reduced by applying a notional tax charge
  • Step 3: Any credit higher than your company’s total expenditure on R&D workers’ PAYE and National Insurance contributions will be added to any expenditure credit in the next accounting period
  • Step 4: Any remaining amount is used to pay outstanding corporation tax liabilities for accounting goods
  • Step 5: The credit can be surrendered in whole or part to any group member
  • Step 6: The credit can be used to discharge any other company liabilities such as VAT
  • Step 7: The final amount can be paid to the company

Learn more about RDEC.

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