Research & Development (R&D) Reliefs

Limited Company, Research & Development,

It was announced in the recent Autumn Statement that a new R&D scheme for limited companies will come into effect for company accounting periods commencing on or after the 1st April 2024. This will merge the current R&D Expenditure Credit (RDEC) scheme (for larger companies) with the Small and Medium Enterprise (SME) scheme. There will also be a second new R&D scheme for ‘R&D intensive SMEs’.

These are significant changes and come on top of a raft of changes already seen during 2023. HMRC have stated that further action may still be needed to reduce the unacceptably high levels of non-compliance with tax rules in the R&D sector. 

Within the new rules there are new provisions in relation to:

  • Who can claim relief when companies contract out R&D activities;
  • The definition of qualifying expenditure, taking into account whether the R&D has been undertaken in the UK,
  • The qualifying criteria for ‘R&D intensive’ companies, along with a new approach for companies who may fluctuate in and out of the status; and
  • Restrictions on nominations and assignments of R&D relief payments.

Any company claiming (or considering claiming) R&D reliefs will need enhanced support to both ensure compliance and to adopt the new rules and framework. 

If you’d like our input on any claim, please get in touch. We can help you, or can provide you with details of external specialists, if that would be more suitable.

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