Two developments in R&D tax incentives could have a significant impact on businesses claiming the relief. From 1 April 2020, rules intended to prevent abuse of the SME R&D tax credit will limit the credit to three times the claimant’s total PAYE and NICs liability for that year. This could particularly impact businesses where staffing costs are not a significant element of R&D expenditure. HMRC has also developed a digital form designed to prevent the poor quality information provided by many claimants for R&D relief. While this will set a much more explicit expectation of the information that should be submitted, the forms may only be used by companies that can cover at least 50% of their R&D claim costs within ten projects.
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Two developments in R&D tax incentives could have a significant impact on businesses claiming the relief. From 1 April 2020, rules intended to prevent abuse of the SME R&D tax credit will limit the credit to three times the claimant’s total PAYE and NICs liability for that year. This could particularly impact businesses where staffing costs are not a significant element of R&D expenditure. HMRC has also developed a digital form designed to prevent the poor quality information provided by many claimants for R&D relief. While this will set a much more explicit expectation of the information that should be submitted, the forms may only be used by companies that can cover at least 50% of their R&D claim costs within ten projects.
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