R&D Relief - Budget Update

There were no significant changes to R&D tax relief in the budget.  After the raft of complex and negative changes in the R&D schemes over recent times, this was welcome news, with the Chancellor making a commitment to ‘maintain' the UK’s generous R&D reliefs.  This will hopefully offer some stability following the last couple of years.

The Corporate Tax Roadmap which was published alongside the budget echoes the message of stability, with the commitment to maintain the merged RDEC and ERIS scheme rates. The Roadmap also commits to:

• Enhancing the administration of R&D reliefs by establishing the R&D expert advisory panel, continuing to improve signposting and guidance on R&D reliefs, and launching an R&D disclosure facility by the end of 2024. 
• Confirming a consultation on widening the use of advance clearances in the R&D reliefs. 

HMRC also published R&D statistics which showed: 

• The number of HMRC R&D enquiries continued to rise, with the tax clawed-back increasing. 
• The number of SME companies claiming R&D relief has fallen significantly. 
• The number of complaints received by HMRC regarding the compliance process has increased, with almost half of those complaints upheld. 

As a further Mandatory Random Enquiry Programme is underway, it is imperative claimant companies' R&D teams are fully up to speed with the complex rules and capture comprehensive supporting project evidence in ‘real-time’, to enable a detailed and compliant R&D report and claim.

JS’s expert R&D team can assist with all aspects of claiming R&D relief, please get in touch if you’d like more information in this area.