27TH OCTOBER, 2021

Breaking News from Budget 2021 on UK R&D Tax Credits

At the previous Budget in Spring, the government launched a review of R&D tax reliefs alongside a public consultation. The Chancellor has now announced a series of initial changes as part of this review.

At Budget 2021 the government announced a review of the reliefs, supported by a consultation with stakeholders. This consultation explored the nature of private-sector R&D investment in the UK, how that is supported or otherwise influenced by the R&D relief schemes, and where changes may be appropriate.

Reforming UK R&D Tax Reliefs

According to HMRC, R&D tax reliefs will be reformed to support modern research methods by expanding qualifying expenditure to include data and cloud costs. Additionally, steps will also be taken to further improve the reliefs’ effectiveness by refocusing government support towards innovation in the UK, and by targeting abuse and improving compliance.

Following the consultation launched at Spring Budget 2021, the government is announcing reforms to R&D tax credits.

  • To ensure the R&D tax reliefs continue to support cutting edge R&D methods, the government will expand qualifying expenditure to include data and cloud computing costs, reinforcing the UK’s status as a science superpower.
  • Many other countries, including Australia and the USA, do not offer relief for R&D activities performed overseas and so therefore to more effectively capture the benefits of the reliefs, including improved skills, know-how and understanding, the government will refocus the reliefs towards innovation in the UK. This means the the UK will be focus away from allowing companies to claim costs from overseas activity.
  • The government will also set out plans to tackle abuse of and improve compliance with the R&D tax reliefs later in the autumn.

What next?

Further details of the changes and next steps for the review will be set out in the Government’s further tax administration and maintenance announcements later in the Autumn and we will be sure to keep all our clients updated when we receive more information.

Maximise your claim with Tax Cloud

Eligibility criteria and the red tape around dates and types of projects can make the R&D tax credit application process a daunting prospect. There are plenty of hoops to jump through that many claimant's miss without the guidance of an expert-led R&D tax portal, like Tax Cloud.

Tax Cloud is a self-service R&D tax claim portal. It’s supported by the R&D tax experts at Myriad Associates who are on-hand to guide you through the entire claims process and check your claims report before it goes to HMRC. With Tax Cloud you’ll get expert advice, your report will be error-free, and your claim will win the maximum amount of R&D tax relief possible, all at a fraction of the cost of hiring an R&D tax consultant.  

Get in touch by calling 020 7360 4437 or using the contact form. One of our friendly team will advise you on the best way to proceed with your R&D tax claim.

 

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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Myriad Associates helps businesses maximise tax reliefs and secure R&D grant funds. We specialise in R&D Tax Credits, Video Games Tax Relief, Innovate UK grants, Horizons 2020 grants, and Research and Development Capital Allowance Claims.

  • Submitting R&D tax claims since 2001
  • 100% success rate
  • Over £100m claimed and counting
  • Industry leading specialists
  • In-house technical, costing and tax experts
  • Member of the Research and Development Consultative (RDCC) committee

Meet some of the team behind Tax Cloud

Barrie Dowsett Barrie Dowsett ACMA CGMA Chief Executive Officer
Lisa Waller Lisa Waller CTA, ACCA R&D Tax Manager
JEan Rollinson Jean Rollinson Senior Technical Analyst/Writer
Rabia Mohammad Rabia Mohammad Corporate Tax Associate