Making R&D tax relief easier for SMEs

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Making R&D Tax Relief Easier for small business It is pleasing to see further emphasis being placed on the SME R&D tax incentive scheme with the recent launch of HMRC’s paper “Improving access to research and development tax credits for small business” which you can download by clicking here. (Or, to save you the bother, you can simply browse through the slides above that aim to capture the highlights!)Key proposals include:

  • Increase awareness of the R&D tax relief scheme – HMRC will aim to engage with government agencies such as Innovate UK and other similar organisations e.g. Growth Hubs, to help identify companies that might also be eligible for enhanced R&D relief (if not already claiming). HMRC will also engage in further advertising and social media activities to help promote the benefits and availability of the R&D tax incentive over the next two years.
  • Introduction of a R&D tax HMRC advance assurance process aimed at small companies (defined as having turnover of less than £2m and fewer than 50 employees). The advance assurance scheme will be introduced this month (November 2015) and will aim to promote increased certainty for potential claimants.
  • Improvements to the online HMRC guidance – there was an acceptance that some of the online case studies and definitions within the HMRC guidance needs freshening up (especially for more tricky areas like software development) and HMRC will introduce new (more user-friendly) guides and templates to help small companies identify qualifying activities and expenditure.

Steve Livingston, Managing Director of leading innovation tax specialists, ip tax solutions commented:

“We are pleased to see such emphasis being placed on what is already proving to be one of the most valuable sources of funding for knowledge-centric companies across the UK.

R&D tax claims are already on the rise with £800m claimed by SMEs in 2013-14 and this raft of new measures can only help increase this figure further for the benefit of the wider UK economy.”

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