Autumn Statement 2023 : Changes to R&D Tax Credit

Major changes are announced, including a merger of the SME and RDEC schemes and adjustments to support for loss-making SMEs, reflecting the UK's evolving approach to fostering research and development.

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17.06.24

4 min

2023 Autumn Statement: Transforming the UK's R&D Tax Credit Landscape

The 2023 Autumn Statement is here and has brought news to the UK R&D Tax Credit field. Here are the highlights presented in the Statement :

As it was already rumored, the SME and RDEC scheme will merge into a single unified scheme. This will apply to expenditure incurred on or after 1st of April 2024.
For accounting periods beginning on or after 1 April 2024 there will only be 2 R&D schemes available: the merged scheme and the SME intensive scheme (for R&D intensive loss-making SMEs).
The notional tax rate applied to loss-making companies in the merged scheme will be lowered from 25% as per the current RDEC scheme, to 19%.
The intensity threshold in the additional support for R&D intensive loss-making SMEs will be reduced from 40% to 30%.
Subsidised (i.e., grant funded) expenditure will not be restricted in the new merged scheme.

A few points were also made regarding contracted out R&D (more details to be released later) :

When a company contracts a third party to undertake part of the work of the R&D project, the company commissioning the R&D work will be the one allowed to claim for it and not the subcontractor.
If a subcontractor is performing R&D work for an overseas company, then they could claim under the new merged scheme.
Should a subcontractor carry out work for another company, but this work does not form part of the R&D for the customer and the subcontractor is the one initiating the work and bearing the risks, then they could claim for it proving the work meets the qualifying criteria.

Things in the UK R&D Tax Credit realm have frequently changed in the past few years, so if you’d like us to help you navigate those changes, don’t hesitate to contact us !

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News 17.06.24

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