AITI Chartered Tax Adviser
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Reliefs

The main reliefs from corporation tax are:

  • Film relief. This gives an investee company a film corporation tax credit equal to 32% of the lower of:
    • the eligible expenditure,
    • 80% of the total production cost, and
    • €70m.

The 32% is uplifted in certain regional areas to 37% (years 1 and 2), 35% in year 3, and 34% in year 4.

  • Charges, i.e., interest, annual payments and royalty payments (s 243).
  • Interest on money borrowed to invest in another company (s 247), but such relief is denied in the case of lending between connected companies if there is a mismatch between interest lent and claimed.
  • Investment in renewable energy (s 486B).
  • Research and development expenditure – a 25% tax credit against corporation tax liability and can lead to a repayment of up to 33% of unused tax credit not fully used in the first accounting period (s 766). Grants must be deducted from qualifying R&D expenditure.
  • For micro and small companies (subject to EU approval):
    • R&D tax credit rate is 30%.
    • The payable element of the R&D tax credit is based on twice the current year payroll.
    • Pre-trading R&D expenditure can qualify but is limited to PAYE, USC and VAT liabilities for the same period.