Autumn Statement 2022: What it means for R&D Tax Relief

  • By James Kennedy
    • 10-11-2022
    • read
  • Twitter
  • Linkedin

Yesterday, during The Autumn Statement Jeremy Hunt stated “I have decided today to cut the deduction rate for the SME scheme to 86% and credit rate to 10%, but increase the rate of the separate R&D Expenditure Credit from 13% to 20%. Despite raising revenue the OBR have confirmed that these measures have no detrimental impact on the level of R&D investment in the economy. Ahead of the next budget we will work with industry to understand what further support R&D intensive SMEs may require.”

These changes will apply to expenditure incurred on or after 1 April 2023.

Whilst the rate of relief for SMEs will be reduced, in practical terms the reduction will be largely offset for profitable SMEs by the rise in the headline corporation tax rate to 25%. The shift will be felt most by loss-making SMEs and it is unclear how reducing the funding available to businesses in the start-up/growth/scaling-up phase will help tackle fraud and abuse, whilst the clear winners following the most substantive change to the R&D tax relief scheme in 20 years are large companies.

Should you have questions on the impacts of the changes announced to your business’s R&D claim, please do get in touch.

Want to find out how these changes might affect your business?

Get in touch
arrow_outward arrow_outward

Author

James Kennedy

Head of Tax

Explore our latest insights

View more! arrow_forward

LEYTON UK Responds to the Government’s Autumn Statement

What has changed? During the Autumn Statement, Jeremy Hunt stated, “I have decided today to...

CCL Exemptions Explained: Everything That You Need To Know Abo...

What does CCL mean? Exemptions are available for businesses in the manufacturing and transport se...

R&D tax credits

R&D tax credits, a key ingredient to help UK businesses su...

Over the last 20 years R&D Tax Credits have helped thousands of UK businesses to invest in R&...

Leyton responds to the government’s ‘growth plan’ for the UK

Leyton responds to the government’s growth plan

Note: Measures in the government’s ‘growth plan’ for the UK are fluctuating. Le...