Research and Development (R&D) is a Corporation Tax relief that is a government support to some UK companies working on innovative projects in science and technology. There are currently two R&D schemes:
- For large companies, Research and Development Expenditure Credit (RDEC) and
- For small or medium enterprises (SMEs), SME R&D tax relief
There are strict terms and conditions of eligibility and the Government has introduced measures to tackle what it perceives as abuse of this support package and non-compliance. At the same time though, they have updated what counts as qualifying expenditure, including 21st century realities such as costs for data licences and cloud computing.
For NEW R&D relief claims for accounting periods starting on or after 1 April 2023, from 8 August 2023 the following changes are in place:
- New claims must be made digitally accompanied by a compulsory additional information form
- Notifications must be made in advance of any R&D claim being made on a Corporation Tax return,
and
- The notification and additional information form must contain details of any agent involved with making the R&D claim
Note that not all companies involved in innovation will be entitled to claim R&D tax relief. An accountant will be able to advise on an effective and achievable business plan for your company and help make a grant application – or advise if an application will be turned down.