The new Chancellor Jeremy Hunt delivered his Autumn Statement on Thursday 17th November with a number of key legislation changes.
After reports of abuse and fraud with the R&D SME scheme, the Chancellor announced a cut in the enhancement rate from 130% to 86% and the tax credit rate is being reduced from 14.5 % to 10%.
With regards to the RDEC scheme, this will increase from 13% to 20%.
The Government is still committed to encouraging R&D and is reviewing the system in order to simplify the process. They’ll also be looking at expanding the qualifying expenditure to include data and cloud costs and refocusing the support towards innovation in the UK.
The changes are due to take place from April 2023 which will give businesses some time to plan
With HMRC focusing on tackling fraud it’s vital that you ensure you are discussing your claim with an expert to ensure you’re compliant and maximising the amount you can claim.
Jon Goodier, Director said “The decision to cut R&D tax credit for SMEs is really frustrating, but with the qualifying expenditure expansion planned for April 2023, this should help partly mitigate the reduction of the enhancement rate. We’ll of course continue to work closely with clients to maximise their claims by identifying all relevant and eligible costs related to their R&D activities”
R&D tax credits can be a bit of a minefield, so to ensure you are maximising the amount of R&D tax credit that you can claim, it’s worth discussing your claim with an expert.
