The government has today launched a consultation on an above the line (ATL) R&D tax credit that Chancellor George Osborne highlighted in last week's budget statement.
The tax credit is intended to help large companies create and boost innovation, jobs and UK exports.
Osborne said that the ATL credit would be available from April 2013, with a minimum rate of 9.1 percent before tax.
Loss-making companies will be able to claim a payable credit, the level of which will be decided after the consultation.
With the existing R&D tax credit, businesses have to wait until they are profitable before they benefit from government support. Furthermore, the ATL credit will be calculated as a percentage of the company's R&D spend, instead of the current 'superdeduction' tax relief, which reduces taxable profits.
However, the ATL credit – first announced in autumn 2011 – will only be available to large companies, which Osborne did not clarify during his budget announcement. This will come as a disappointment to start-ups hoping to take advantage of extra financial support.
David Gauke, exchequer secretary to the Treasury, said: "The government is committed to encouraging research, development and innovation in order to achieve higher growth.
"The ATL credit for R&D will encourage large company research and development and ensure that the UK continues to be one of the most attractive places in the world to undertake R&D."
The government said it did not plan to change the existing SME R&D tax credit to an ATL credit, and insisted that the level of support under the small business scheme will not be reduced as a result of the new credit. The small company R&D tax credit rate was increased from 175 percent to 200 percent in 2011, and then to 225 from April 2012.
The consultation, available here, will close on 29 June 2012.