HMRC potentially merge R&D schemes
At the Autumn Statement in 2022 the Chancellor announced that, as part of the ongoing review of the R&D reliefs, the government is reforming the reliefs to ensure taxpayers’ money is spent as effectively as possible. Part of these reforms included the possibility of merging the SME and large company (RDEC) schemes, into one single scheme.
An initial consultation process took place between 13 January and 13 March 2023, to discuss the benefits and drawbacks of merging the schemes. Following the government reviewing the responses received in the initial consultation process, draft legislation for the merged R&D scheme has been published, which can be viewed here.
A technical consultation will now take place until September 2023. Amendments will then be sought from parliamentary council before a decision is made at the next fiscal event (likely to be the Autumn Budget) on whether to merge the two schemes. The proposed new scheme and associated measures would take effect in relation to expenditure incurred on or after 1 April 2024.
At last month’s HMRC Research & Development Communications Forum (RDCF), HMRC stated that there was still no firm decision on whether the merged scheme would go ahead but given the significant effort which has been put into the proposal, together with further details provided on the call, it certainly seems likely that these reforms will be introduced next year.
If you have any questions regarding HMRC’s R&D tax relief schemes, please do not hesitate to contact us.