Question 1

Section A: Objective Test

NovaTech Ltd is a loss-making Small and Medium-sized Enterprise (SME) that incurred £100,000 of qualifying Research and Development (R&D) expenditure in the year ended 31 March 2024. The company wishes to surrender its surrenderable loss for an R&D payable tax credit.

Assuming the standard SME R&D rules for expenditure incurred after 1 April 2023 apply, what is the maximum R&D payable tax credit NovaTech Ltd can claim?

Accepted Answer

Apply the post-April 2023 SME R&D rates: 86% enhancement on qualifying expenditure, and a 10% payable tax credit rate on the surrenderable loss.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using the pre-April 2023 rates (130% enhancement and 14.5% credit).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 1

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