Changes to the R&D tax relief scheme – a hydraulic hammer to crack a nut?
ABGI have evaluated the potential adverse effects of recently announced changes to the R&D tax scheme on UK businesses and the economy.
30 January 2023
The changes to the R&D scheme are intended to reduce fraud, which HMRC suspects is occurring as a result of inaccurate R&D tax relief claims by SMEs. A consequence however is the cuts to the net tax benefits received by companies claiming through the SME scheme.
When Make UK canvassed its members’ opinions for the latest “Executive Survey” in Autumn 2022, 57% of respondents announced they were planning investment in New Product Development over 2023. Fast forward to December 2022, just a few weeks after the Government announced a slew of changes to the R&D tax relief scheme and the mood is very different indeed – with Make UK’s Q4 Manufacturing Outlook reporting the first decline in the number of members planning to invest in their businesses in nearly 2 years!
Could recent changes to the R&D tax relief scheme, which is especially important to SMEs who rely on R&D tax benefit to support innovation and growth, be responsible for Make UK manufacturing membership experiencing a shift from optimism to trepidation?
Read the full article here to view ABGI's insight and opinion on the recent changes, including a statement from Brian Frame, CEO at Rautomead, an SME who has been claiming R&D tax relief for years.
Analysis originally posted on Zenoot.