Large companies and R&D enhanced deduction
The relief given to large companies up to 31 March 2016 (unless an earlier election was made) was a 130% deduction in calculating total taxable profits for qualifying expenditure incurred. In practice, this was given by allowing a further 30% deduction of the qualifying R&D costs in addition to the standard 100% deduction for qualifying expenditure.
CTA 2009, s 1074(7)
From 1 April 2016, or earlier by election, the RDEC has replaced the large company scheme, see the Research and development expenditure credit (RDEC) guidance note. Qualifying expenditure and conditions for R&D tax relief were essentially the same under the previous large company scheme, just the method of relief was changed.
For this purpose, large companies are those that do not qualify as small or medium-sized enterprises (SMEs) under the rules detailed in the Outline of tax relief for research and development (R&D) expenditure guidance note.