In Budget 2021 Chancellor Rishi Sunak announced plans for a broad review of the R&D tax credit scheme. A consultation was launched, seeking views on all elements of the scheme, to ensure that R&D tax relief remains up-to-date, competitive, and well-targeted.
At EmpowerRD we’re passionate about the power of R&D tax reliefs in incentivising investment in research and development and ensuring the UK remains a competitive location for cutting-edge research.
As a trusted advisor, we’re committed to using our insights and influence to strengthen and drive the future of the scheme. Therefore we will use the Consultation as an opportunity to share the views and experiences of our clients, and other businesses who claim.
What does the consultation cover?
The Consultation is comprehensive. It covers all aspects of how the two R&D tax relief schemes support R&D in the UK. It asks whether the schemes reflect how R&D activity is currently being conducted and how things could be improved upon.
Some of the key areas that the government is seeking views on include:
- To what extent the rates of relief impact investment decisions. If rates were higher, would businesses invest more?
- Whether the difference in rates between the RDEC and the SME scheme is appropriate. Is there a case for consolidating the two schemes into one?
- If R&D tax relief could better incentivise research and development activities that have specific social value. For instance, in developing green technology. Or regionally. Geographically, claims tend to be concentrated in businesses with a registered office in London, the South East, or the East of England.
Last year the Government consulted on bringing data and cloud computing costs into the scope of R&D tax reliefs. Learn more in our blog here. The responses showed a significant appetite for doing so. HMRC agreed. So as a result, the consultation is also asking whether there are any other areas where qualifying expenditure could be widened.
How can I have my say?
EmpowerRD will be compiling a response ahead of the Consultation deadline on 2 June 2021. We’re keen to include the views of our clients and other businesses undertaking R&D.
Do get in touch with us if you would like to share your experiences of claiming R&D tax credits. We will incorporate all feedback into our detailed submission to HMRC.