Increasing business investment in R&D is a priority for the government. Although R&D tax reliefs remain a well-established method to help achieve this, the current R&D tax incentives require reform. The consultation reviewing R&D tax reliefs is ongoing, but some new measures are planned with effect from April 2023. These include: extending the scope of qualifying expenditure to include expenditure on data and cloud computing; excluding relief for overseas R&D activities carried out by subcontractors and externally provided workers; some administrative reforms to tackle abuse; and some changes to address a number of existing anomalies and unforeseen consequences in the legislation. Meanwhile, HMRC has increased its compliance activity, but questions remain around whether its efforts are being targeted effectively.
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Increasing business investment in R&D is a priority for the government. Although R&D tax reliefs remain a well-established method to help achieve this, the current R&D tax incentives require reform. The consultation reviewing R&D tax reliefs is ongoing, but some new measures are planned with effect from April 2023. These include: extending the scope of qualifying expenditure to include expenditure on data and cloud computing; excluding relief for overseas R&D activities carried out by subcontractors and externally provided workers; some administrative reforms to tackle abuse; and some changes to address a number of existing anomalies and unforeseen consequences in the legislation. Meanwhile, HMRC has increased its compliance activity, but questions remain around whether its efforts are being targeted effectively.
If you are not a subscriber, subscribe now to read this content.
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