The inside guide to R&D tax relief
Incentivising businesses to become more innovative
There are two schemes in place, one for SMEs and the other, for large businesses.
- SMEs can benefit from an enhanced deduction of 130% up until 1st April 2023
- From 1st April, the rate available for qualified SME expenditure is being reduced to 86%
- Where the qualifying expenditure creates a loss, SMEs can claim a cash tax credit of 14.5% up until the 31st March 2023. After this date, the rate is will be reduced to 10%.
Other changes will be coming into force from the 1st April 2023.
Major Changes to R&D Rules from April 2023
As you will know, in the Autumn Statement 2022 Chancellor Jeremy Hunt announced changes to R&D Tax Credits for UK businesses, affecting both SMEs and large organisations from April 2023. The changes to R&D Tax Credits reflect a shift in strategy from the Treasury for investment in UK innovation.
R&D expenditure credit (RDEC) Scheme
Whether you’re an SME or a large business and are spending money on Research and Development, you could be entitled to receive a reduced tax bill, or even a cash repayment.
Is my business eligible for R&D tax relief?
- Have you developed your own software, IT solutions or products?
- Do you manufacture products?
- Have you improved or sought to improve your processes or the efficiency of your services?
- Do you regularly change the way you make your products?
- Have you tried to resolve technical product or process challenges?
How do I know what I can claim?
- Marketing & Event Management
What about projects that have stalled?
Do my ideas count?
What about if I haven’t got the time or expertise to sort my claim?
ACA FCCA CTA
Mark has more than 13 years of experience as an accountant and tax practitioner and is a member of the Chartered Institute of Taxation (CIOT) and a fellow of the Association of Chartered Certified Accountants (ACCA)