R&D tax credit relief changes – What business owners need to know.

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Plans to significantly overhaul the current Research & Development (R&D) tax relief system were confirmed by the Government in November’s Autumn Statement.

These changes, primarily the introduction of a unified ‘research and development expenditure credit (RDEC)-like’ scheme, are set to substantially impact how businesses, especially small and medium-sized enterprises (SMEs), approach R&D tax credits.

At Condy Mathias we can provide assistance on any queries you may have about the changes to the R&D schemes. Contact us for more information.

Merged R&D tax credit regime

The new scheme, applicable from 1 April 2024, merges the existing R&D tax relief frameworks into a single system. Key features include:

Subcontracted R&D rules under the merged regime

The subcontracting rules are perhaps the most significant change. Under the new regime:

These rules require a detailed assessment to determine the rightful claimant in each scenario.

For further guidance on these changes, Condy Mathias are here to help. Contact us today.

Special considerations for loss-making and R&D-intensive SMEs

The Government has made an exception for loss-making R&D-intensive SMEs:

Preparing for the changes

Businesses must start preparing for these changes now:

Review current R&D activities – Assess how the new rules will impact your existing and planned R&D activities, especially if you subcontract R&D.

Understand the financial implications – Analyse how the changes in credit rates and benefits for profit and loss-making companies will affect your financial planning.

Stay Informed – Keep an eye out for further legislative details and guidance to fully understand the nuances of the new regime. Our expert R&D team can keep you informed, contact us for more information.

The overhaul of the R&D tax relief scheme marks the end of a cycle of changes which began in 2021. While these changes promise to streamline the process, they also bring a host of considerations that could be problematic if not handled properly.

Our R&D tax relief experts can advise you on these changes plus any other questions you may have surrounding R&D tax claims. Contact us today for support.