UHY Ross Brooke Chartered Accountants

R&D tax changes – will you be a winner or loser?

R&D tax relief

Currently HMRC is undertaking a consultation process regarding the potential options to simplify the UK’s R&D regime.

By Mathew Browne, Senior Tax Manager

Proposals are that the existing RDEC and the SME reliefs would be replaced, potentially with effect from 1 April 2024 (according to the Treasury). Going forwards only a single R&D scheme based on the research and development expenditure credit (RDEC) would be available to be claimed.

Please note this is not prescribed law and the consultation process closes on 13 March 2023 but first seeks views on:

  • proposals for any alternative schemes;
  • should the new scheme be an above the line RDEC-like credit?
  • should more generous support should be provided for more R&D intensive companies;
  • should any thresholds be in place regarding the claiming of expenditure;
  • the specific treatment of subcontracting; and possible simplification regarding the PAYE/NICs cap.

Personally, I believe the timeline seems ambitious and does not permit companies the bandwidth to adjust forward projections or allow timely cash flow planning tweaks. More importantly there will be some significant “losers” here as it seems those intensive R&D SMEs would see their R&D rate cut significantly.

Please get in touch if you would like to discuss this, or any other aspect of R&D tax relief.

Get a FREE review of your R&D process and a copy of the UHY Research & Development Tax Relief Guide

Companies applying for R&D tax credits need to follow the rules carefully in order to maximise their tax relief. New changes to the R&D tax credit scheme come into force from 1st April 2023 aimed at reducing incorrect or fraudulent claims, improving compliance and encouraging UK innovation.

UHY Ross Brooke is delighted to offer a complimentary review of your research and development tax credit process with one of our R&D tax credit specialists. Please fill in the form below for your free review and Tax Relief Guide.

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