R&D Tax Reliefs Review | Atek Accounting

The government launched a consultation this month to simplify the UK’s R&D tax relief system

The 8-week consultation for the R&D Tax Review, which continues until March 13, 2023, presents proposals for replacing the two current R&D tax relief schemes – the Research and Development Expenditure Credit (RDEC) and the Small and Medium Enterprises (SME) R&D relief – with a single scheme.

According to the Department of Treasury, “A scheme modelled on the current RDEC for SMEs would give decision-makers in smaller companies clearer information, which will help them set budgets for R&D. In contrast, for those claiming SME tax relief in the current setup, the exact amount of money their firm will receive can only be known with certainty at the end of the accounting period.”

During the 2021 tax relief consultation, those in favour of unifying the two schemes noted these possible advantages:

  • The UK is unusual in having two R&D tax relief schemes, and unifying would help with overall tax simplification.
  • It would make the credit more visible for decision-makers if all companies received relief as an “above-the-line credit” (as is the case for RDEC).
  • Other respondents also pointed out the fact that SMEs that make small profits cannot currently benefit from carried-forward losses from previous years – which could be helped by them getting above-the-line credit.

The government would like to hear from a wide range of sources, including individuals, companies, representatives, and professional bodies, and especially invites comments from research- and development-intensive businesses and those representing them.

If implemented, the new scheme is expected to be in place on April 1, 2024.

Our expert team at Atek specialises in navigating the complexities of R&D tax relief, ensuring you receive every eligible benefit. Don’t leave money on the table when your groundbreaking work can pave the way for a brighter future. Contact us today and let us help you fuel your innovation while maximising your financial returns.

For more information on the R&D Tax Reliefs Review, visit: Gov UK Tax Relief Reform Consultation.