What do You Need to Consider?

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From 1 April 2023, a number of changes are expected to the UK Research and Development (R&D) Tax Relief scheme. This Article summarises the key points arising from the July 2022 HMRC draft legislation for R&D tax relief changes, originally announced in the 2021 UK Autumn Budget.

These changes will take effect for accounting periods beginning on or after 1 April 2023. The changes will impact companies claiming under either of the two schemes (SME or RDEC).

The UK Government has a target to raise investment in R&D to 2.4% of UK GDP by 2027 jordan mobile database and R&D tax relief forms part of that goal, by reducing the cost of innovation for UK companies.

UK R&D Tax Relief
UK Research and Development (R&D) tax relief can prove an extremely valuable tax relief and, for companies carrying out significant qualifying R&D projects, it may mean not having to pay any corporation tax for many years or even claiming a repayment from HMRC.

For small to medium sized enterprises (SMEs), a deduction of 230% of the amount spent on R&D can be made from taxable profits, reducing the corporation tax due. For loss making companies, the scheme allows relief upfront as a cash payment of 14.5% of the ‘surrenderable loss.’

For further information regarding the benefits available and the process that needs to be followed, please contact.