The R&D tax relief scheme needs an update
There is currently a wide-ranging review being conducted into the qualifying expenditure on research and development (R&D) activity.
With the government setting a target of raising total investment into R&D to 2.4% of UK GDP by 2027, the Chancellor Rishi Sunak announced an extensive review of the system. The main issue is to ensure the reliefs continue to be fit for purpose.
One of the main objections is to look at the definition of qualifying R&D and how this can be expanded. Under the current scheme, small businesses can claim up to 33p for every £1 spent on qualifying R&D and large business can claim up to 11p.
Businesses have developed since the initial launch of the R&D tax relief scheme in 2000. Since its introduction the internet has seen many digitally based businesses set up. In order to ensure the R&D relief scheme is relevant and to encourage more innovation a review and an update should be made to the definition of R&D. The ICAEW has pulled together a review of the consultation and the need to update the definition of R&D in this document.
Jon Goodier, Director at R&D Taxbox said “At R&D Taxbox we welcome the review of the R&D tax relief scheme. Businesses have changed since the introduction of the relief over 20 years ago.”
R&D tax credits are a complex process, to ensure you are claiming your full entitlement get in touch here.