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R&D Tax relief - Good news on inclusion of production costs for manufacturers

Published by Kingly Brookes LLP

Revised guidance recently issued by HMRC on the circumstances when a company can include the costs of the production of goods is good news for those companies that have to produce the finished goods in order to carry out R&D.

HMRC have issued draft guidance on the meaning of production as it relates to the potential for a company to include the cost of manufacturing goods where R&D activity takes place during the manufacture of those goods and then it sells them on to a customer, or intends to.

HMRC now accept that if the main point of the R&D activity is experimentation, contributing to making an advance in science or technology, then there are circumstances where the associated costs can be included in the claim, even if the intention is to sell the output from the R&D activity. Prior to this revised guidance HMRC's stance was that if the intention was to sell the output of the R&D then the costs could not be claimed.

Please follow this link to find out if you could benefit under the proposed changes:

R&D Tax relief – Good news on the inclusion of production costs for manufacturers

Please do not hesitate to contact John Moore on 0207 292 8850 or at john.moore@kinglybrookesllp.co.uk if you would like to discuss the implications of this for your company.

About Kingly Brookes
Kingly Brookes is a firm of chartered accountants based in Cambridge and London specialising in working with technology companies to optimise their claims for R&D tax relief and to understand the potential to benefit from the forthcoming Patent Box regime when it is enacted.

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