The rules with the schemes will change from 1st April 2023, which will reduce the amount smaller businesses can recover, so if you’ve not yet claimed, contact us today so we can safely maximise your claim in line with the current rules.
Research and Development (R&D) tax relief is a beneficial scheme for large and small businesses in the United Kingdom.
The scheme allows businesses developing new products and services to recover a percentage of the costs used up in a qualifying activity.
Hurry, don’t wait till after the rules change – start your R&D tax claim now and protect your claim value.
Over the years, the amount that can be recovered per pound has changed, and with the Autumn 2023 budget, the rules have changed again. Sadly smaller businesses seem to be being penalised as the Government has reduced the allowance for them, whilst increasing it for larger companies.
This move by the UK Government has raised some eyebrows as this seems to go against what the scheme is there for, supporting emerging innovative companies.
From 1st April 2023, the SME R&D scheme’s additional deduction will decrease from 130% to 86% and the SME credit rate will fall to 10%.
Conversely, the Research and Development Expenditure Credit Scheme, typically for the benefit of much larger and well-established companies has increased from 13% to 20%
The Government has announced plans to consult with industry to form a single scheme however, in practice this may not be an even playing field as there is such a disparity between small and larger companies.
Whilst we understand the economy has been through a tough time with Covid and now the anticipated rise in interest rates, many smaller businesses will feel the pinch which might well deliver another unexpected blow to the economy in the near future.
When an economic downturn happens, businesses must reduce overheads whilst trying to protect profit and safeguard jobs. This isn’t an easy balance when some of a business’s customers could be faced with the reality of being forced into administration.
For this reason, we would urge the Government to reconsider the announced reduction in the SME R&D scheme as many smaller businesses are challenging their industry’s status quo which ignites innovation and development.
As already stated, with the rules set to change on the SME R&D Tax Relief scheme, if your business has not yet claimed, don’t leave it till the last minute and lost what could be thousands of pounds for your business.