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

  • By James Kennedy
    • Nov 18, 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

A guide to claiming R&D Tax Relief for subcontracted work

Subcontracting work for research and development purposes brings many advantages. It allows compa...

leyton

Leyton UK Awarded Exceptional Learning Organisation Accreditat...

We are delighted to announce that Leyton UK has recently been accredited as an ‘Exceptional Learn...

How the football industry can fund innovation through R&D ...

Sports science is booming within the football industry. Innovative new projects and techniques ar...

In Technology Research Facility: Female Project Manager Talks With Chief Engineer, they Consult Tablet Computer. Team of Industrial Engineers, Developers Work on Engine Design Using Computers

Battery technologies: market drivers, challenges and future R&...

The battery technologies market has the potential to enter an exciting period of growth. Accordin...