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Autumn Budget Statement

Concern over the implementation of R&D changes

BR Autumn Budget 23

Changes to R&D that simplify the current schemes are welcome, but the changes are happening at a concerning speed

Ele Theochari
Ele Theochari, Corporate Tax Partner


Ele Theochari, Corporate Tax Partner and R&D specialist said:

“The chancellor has confirmed that the merged R&D scheme will come into effect for accounting periods beginning on or after 1 April 2024, and that overseas costs will cease to qualify for R&D claims from that date.”

Additionally, he announced:

  •  A reduction in the notional tax rate applied to the RDEC under the merged scheme, meaning an effective post-tax RDEC rate of 16.2%
  • It will be possible to claim for subsidised or grant-funded projects under the new merged R&D regime as well as subcontracted costs (under certain circumstances still to be published)
  • Further action to reduce “unacceptably high levels of non-compliance” in the R&D regime
  • A reduction in the intensity threshold for the more generous SME R&D intensive regime from 40% to 30% and a one-year grace period to allow companies who dip under the 30% threshold to continue to receive this relief for one year
  • R&D claim refunds henceforth will only be paid directly to the claimant company.”

We welcome any simplification to the current schemes, and particularly clarity over the contentious subcontracting issue; however, keeping a separate SME-intensive scheme and introducing these changes so quickly is leaving taxpayers and advisers concerned. In particular, there is concern over how the merged scheme will be both implemented and administrated by the government and HMRC at a time when the relationship between HMRC and R&D claimants has been drastically eroded.

Would you like to know more?

If you would like to discuss any of the above issues please contact your usual Blick Rothenberg contact or Ele Theochari using the form below.


Contact Ele