Important R&D changes from April 2023

The government are committed to a number of important changes to Research & Development (R&D) tax relief from 1 April 2023. It also looks increasingly likely that the two existing systems will be merged into a single system in future years and we hope to hear more in the March 2023 Budget.

We already know that there will be a significant reduction in the tax relief available to qualifying SME companies from 1 April 2023, with the current 230% tax relief reducing to just 186%. The effect of this change combined with the reduction in the credit rate will reduce the repayable credit for loss making SMEs from £33.35 per £100 spent to just £18.60. Companies affected should consider the timing of their R&D expenditure.

For non-SME companies, the R&D Expenditure Credit (RDEC) is being increased from 13% to 20% as part of the gradual alignment.

There are also important changes to the claim’s notification procedure from April 2023.

If you have any concerns or queries relating to this matter, for further information or to arrange for a no obligation preliminary meeting to discuss how your company could qualify for R&D Tax Relief, please contact us. Our independent experts have many years of experience and success in advising businesses across a wide range of sectors.