Question 1

Section A

'Algae-Plast Ltd', an SME biotech firm, incurred £100,000 of qualifying Research & Development (R&D) expenditure during the year ended 31 March 2024.

What is the total deduction Algae-Plast Ltd can claim against its trading profits for this R&D expenditure?

Accepted Answer

Identify the company size (SME). Apply the current SME R&D enhancement rate (86%) to the qualifying expenditure, and add it to the original expenditure.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using the old 130% rate or confusing the SME scheme with the large company RDEC scheme.

Section A

'Algae-Plast Ltd', an SME biotech firm, incurred £100,000 of qualifying Research & Development (R&D) expenditure during the year ended 31 March 2024.

What is the total deduction Algae-Plast Ltd can claim against its trading profits for this R&D expenditure?

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 3

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