ExpertMedium2 marksMultiple Choice
ACCA · Question 10 · Corporation tax liabilities
An SME incurs £100,000 of qualifying R&D expenditure. Under the SME R&D scheme (using the 86% enhancement rate applicable from 1 April 2023), what is the total deduction from trading profits for this expenditure?
An SME incurs £100,000 of qualifying R&D expenditure. Under the SME R&D scheme (using the 86% enhancement rate applicable from 1 April 2023), what is the total deduction from trading profits for this expenditure?
Answer options:
A.
£100,000
B.
£186,000
C.
£230,000
D.
£130,000
How to approach this question
Add the enhancement percentage (86%) to the original expenditure (100%) to find the total deduction (186%).
Full Answer
B.£186,000✓ Correct
For expenditure incurred from 1 April 2023, the SME R&D enhancement rate is 86%. The total deduction is the original expenditure (£100,000) plus the enhanced deduction (£86,000), totaling £186,000.
Common mistakes
Using the pre-April 2023 rate of 130%, which would give £230,000.
Practice the full ACCA TX — Taxation Practice Exam 6
32 questions · hints · full answers · grading
More questions from this exam
Q01Quantum AI Ltd, a tech startup, commenced trading on 1 January 2023 and prepared its first set of...MediumQ02Marcus, a freelance graphic designer, had an income tax and Class 4 NIC liability of £6,000 for t...EasyQ03Which TWO of the following employment benefits provided to an agriculture worker are EXEMPT from ...EasyQ04To qualify as a Furnished Holiday Letting (FHL), for how many days in the tax year must the prope...MediumQ05An employer provides an employee with a new zero-emission electric company car. The list price is...Medium