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Budget 2021 – R&D Tax Credits: A Developing Relief

Research and Development tax credits have been available for many years now. In his Budget speech on 3 March, the Chancellor launched a review of this highly valuable relief, focusing on the following:

  • How the large company and SME support R&D activity in the UK, how they operate, how they interact and the main design differences in the two schemes?
  • Does either scheme need amended to remain internationally competitive?
  • Do the definitions of R&D remain fit for purpose and is the scope of the relief still robust?
  • Do the current rates of relief remain appropriate?

The consultation is due to be completed on 2 June 2021 after which point the government will assess the responses and act accordingly with the November 2021 Budget being a possible date for implementation of any relevant changes.

EQ alone has delivered more than 400 successful R&D claims for clients and in conjunction with our fellow UK members of the Kreston International network, we have collectively delivered many thousands of claims. We intend to provide responses to HMRC to seek to influence the future direction of this relief.

In particular, we fully support tackling anti avoidance in this area as we continue to see claims being lodged by others which simply lack credibility. It is worth noting that HMRC have recruited more than 100 extra staff to the R&D team so we can expect this area to come under much more scrutiny in future. Watch out for developments in this area!

If you’d like to discuss a potential claim for R&D tax credits, our EQ Taxperts would be happy to help. Get in touch by calling one of our offices or email [email protected].

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