Autumn Statement and the way ahead…
Major changes to the Research and Development (R&D) tax schemes were announced on Wednesday 22nd November 2023 and included a technical note contain new information. This included a merged scheme of both the Research and Development Expenditure Credit (RDEC) and the Small and Medium-Sized Enterprise (SME) intensive scheme.
Implementation dates:
· The merged R&D Tax Relief Scheme will apply to accounting periods beginning on or after 1 April 2024;
· The Scheme for R&D Intensive Loss Making SMEs will apply to expenditure incurred on or after 1 April 2023, and;
· The existing SME and RDEC schemes will continue to apply to accounting periods starting before 1 April 2024.
Key information about the merged and R&D intensive schemes:
Merged R&D Tax Relief Scheme:
· Applies to large companies and SMEs (excluding loss-making, R&D intensive SMEs)
· Relevant to accounting periods starting on or after 1 April 2024
· 20% Gross Credit, above the line (SPR rate applied to loss makers, main rate otherwise)
· Customer claims for subcontracted activities that are part of their R&D
· Subcontractors can claim if it was their intention to undertake the R&D, or it was the customers decision to undertake R&D, but the customer is a non UK-taxpayer
· The receipt of a grant or subsidy does not affect or reduce the claim for R&D tax relief
R&D Intensive Scheme for Loss Making SMEs:
· Applies to loss-making SMEs with either 40%/30% relevant R&D expenditure for the period
· Expenditure on or after 1 April 2023 – 40% relevant expenditure threshold
· Accounting periods on or after 1 April 2024 – 30% relevant expenditure threshold
· 86% Qualifying Expenditure Enhancement and 14.5% Credit on Surrenderable Losses
There was news for R&D claim agents whereby no new assignments of R&D Tax Credits will be possible from 22 November 2023 and nominations for third-party payee to receive R&D Tax Credit payments will no longer be allowable from 1 April 2024.