If your company is subject to UK corporation tax as well as working on an R&D project that qualifies for tax relief, then you may end up incurring some qualifying costs that are linked to overseas activities. In order to qualify for the relief, the company must be subject to UK corporation tax, but the expenditures that qualify may be occurring overseas – for example with subcontracted work.
Note: there are benefits and different treatments depending on whether your fintech is considered a Small and Medium Sized Enterprise (SME) or a large corporation.
If R&D activity is carried out by a division of a UK-based company, but this division is based overseas, it could still be eligible for R&D tax relief. This assumes that your overseas branch is a permanent establishment, whose activities are within the scope of UK corporation tax.
The most important thing to remember is that as of the present date, there is no geographical restriction on R&D tax credits. However, the Government is currently considering restrictions to overseas costs and the consolidation of the RDEC and SME schemes for companies with accounting periods that start on or after 1 April 2024.