R&D Tax Relief Schemes Update
24th November 2021

Given the recent wide-ranging consultation on R&D tax relief, it was probably inevitable that reform of the R&D tax relief schemes (now over 20 years old) would be announced in the Chancellor’s Budget on 27 October 2021, although these announcements were headline only with more details to follow.

Firstly, the good news – up until now only expenditure on software licences can be included in a claim. This will be widened to include data and cloud computing costs.

Less welcome is the announced intention to restrict R&D relief to UK based activities only. Apparently other major technology countries (such as Australia and the USA) only incentivise their own and not overseas R&D expenditure (which can currently be included in a UK claim).  According to Margaret Savory, Tax Partner and R&D specialist at James Cowper Kreston: “These changes may potentially affect many businesses who undertake part of their R&D overseas. Many of my tech-based clients cannot find the necessary skill set in the UK and therefore have no option but to get the work undertaken overseas. I can also think of companies in the biotech sector who run clinical trials in multiple countries. R&D tax relief has proved valuable to these UK- based companies who are developing UK- IP, but in a global context. It will be a shame if they lose relief. However, we don’t have all the details yet, so it will be interesting to see if the effect on these industries has been considered.”

The Government is also concerned about fraud and continued abuse of the schemes. Measures will be introduced to tackle abuse and improve compliance. “This is to be welcomed” Savory commented “as Chartered accountants and chartered tax advisers we take our professional standards seriously and work closely with our clients to ensure that they have robust R&D claims that are compliant.”

 

Find out more about the schemes available here: https://www.jamescowperkreston.co.uk/downloads/r-and-d-tax-brochure.pdf

About the author

Margaret
Savory
James Cowper Kreston
Margaret joined James Cowper Kreston in September 2016 and specialises in assisting entrepreneurial businesses with all areas of their corporate tax affairs both compliance and advisory and through all stages of their corporate life cycle, from small owner managed business start-ups through Private Equity-backed enterprises to AIM-listed companies.

Latest news

For success in product development – start at square zero

For success in product development – start at square zero

When it comes to the commercial success of a technology-led product, there are a number of factors that come into play along the development journey. Have the regulatory requirements been met? Can the design be produced at a viable cost? Is it possible to ensure the quality of the manufacturing process? The list goes on. READ MORE

The not-so-small matter of scale: Making it big in microfluidics

The not-so-small matter of scale: Making it big in microfluidics

Microfluidics is a key technology enabling the development of rapid in-vitro diagnostics (IVD). With applications including COVID-19 testing, cardiac arrest assessment and STD screening, decentralised rapid diagnostics are shaping up to be a major part of the future of healthcare and wellness monitoring. READ MORE

EZ-Charge: Electric vehicle charging solutions made simple

EZ-Charge: Electric vehicle charging solutions made simple

5-million-pound project to bring state of the art, incredibly reliable EV Charging Infrastructure, designed and manufactured in the UK, to Oxfordshire in 2021/22. READ MORE

 

PARTNERS

Visit Britain

Keep in touch

Sign up to the Venturefest Oxford newsletter to make sure you are the first to hear the latest news. The next #vfestox newsletter will be coming out soon! Make sure you're on the list!

 

 

 

 

 

Email Preferences

Venturefest Oxford will be returning on Thursday 25th November 2021

Make connections that lead to new investments, new businesses and new ideas in the high-tech sector in Oxfordshire.