After a turbulent period in the world of R&D tax reliefs, it was good to see no new changes announced in the Budget.
In addition, the Government’s Corporation Tax Roadmap further commits to maintaining both the rate of R&D relief and the Patent Box regime, which should provide some much-needed certainty for innovative companies in the UK.
We welcome the Government’s acknowledgement of the issues arising from HMRC’s increased scrutiny of R&D claims, particularly the commitment to improve the administration of the reliefs.
To this end, the Government will be running a consultation on widening the existing Advance Assurance process, and the proposal for an R&D Expert Advisory Panel trailed at the last Budget is to be adopted. A disclosure facility will also be introduced by the end of 2024, so we can expect further detail on what this will look like soon.
R&D: STAY IN THE KNOW
There are several changes for claimants to become familiar with arising from previous announcements. Many companies with December year ends will find themselves claiming under the new Merged scheme, or the Enhanced scheme, with effect from 1 January 2025.
These new regimes come with changes to the rules on who can claim relief for contracted out R&D as well as restrictions on overseas costs. So, if you have any questions on the operation of R&D reliefs going forward, we’d love to chat.
DON’T FORGET PATENT BOX
Yet again there have been no changes to this relief, and a commitment to maintaining this is also included in the Roadmap. This valuable tax relief offers a reduced rate of corporation tax of 10% (against the standard rate of 25%) on profits arising from qualifying patented technology.
If you’re claiming R&D relief and haven’t considered Patent Box, we’d certainly recommend exploring the opportunities.
If you have any questions on the above, please get in touch.
