R&D Tax Reliefs Consultation - Have your say!

The UK government is inviting views on the design of a potential new single R&D tax relief scheme. The consultation sets out proposals on how a single scheme could be designed and implemented, and the aim is to have this in place from 1st April 2024.

A single scheme would replace the two R&D tax relief schemes currently in place – the Research and Development Expenditure Credit (RDEC) scheme and the small and medium enterprises (SME) R&D relief.

It is vital that you have your say! R&D Tax Reliefs are an essential part of the growth of our sector. These incentives are under threat while the UK government considers changes to the schemes so we must apply pressure to ensure the changes work for our industry. Please click here to access the consultation. 

As the industry body, the MIA is submitting a combined response to the consultation based on the views of our members. We urge you to please contribute. 

To do so, please use the questions below to form your reply. There is no need to answer all questions, just those that are relevant to your business. Please simply send your answers keith.jonker@the-mia.com by no later than 6th March.

R&D Tax Reliefs Review - January 2023
Consultation on a single scheme
Summary of questions 

1. Do you agree a new scheme should be an above the line RDEC like credit? If not, what alternative would you propose?

2. Does the taxability and subsequent different post tax net benefits impact your decision making when allocating R&D budgets?

3. If you use RDEC now, is there anything in your view that should be changed? 

4. Do you agree the same treatment of subcontracting should apply to all claimants in the merged scheme? 

5. If so, where R&D activity is subcontracted, do you think that the customer should claim the tax relief, as in the SME scheme, or the subcontractor, the person carrying on the R&D, as in the RDEC? 

6. Can you see any positive or negative impacts on your business or sector from the Government adopting either approach? 

7. Do you have an alternative model you think could apply all claimants in the new scheme? Please provide qualitative and quantitative evidence with your proposal.

8. What are your experiences of the PAYE / NICs cap? 

9. Are there any ways the Government could simplify the PAYE / NICs cap whilst ensuring there is protection against abuse? 

10. Which of the SME and RDEC PAYE & NICs cap should the Government implement in the new scheme? 

11. Should the Government change the way either cap is calculated if is taken forwards? And if so, how?

12. Do you consider the government should provide more generous support for different types of R&D or more R&D intensive companies relative to less R&D intensive companies?

13. In the event this were to be done, how might this best be achieved within an overall cost envelope?

14. If the schemes are merged do you agree the Government should implement the merged scheme on 'accounting periods starting on or after 1 April 2024? 

15. How can Government ensure SMEs are supported in the transfer into a new scheme?

16. Does claiming for expenditure on qualifying indirect activities influence your decision to undertake R&D? 

17. Do you think a threshold should be implemented? If one was implemented what at what level should it be introduced? 

18. What is the average amount of R&D expenditure per year per firm in your business or sector?