Draft guidance on R&D tax reliefs issued

Comments on the new proposals are welcomed

Following the consultation on R&D tax reliefs issued in December 2022 on proposed changes taking place in 2023, HMRC believes that there is now scope to simplify the system and merge the existing schemes

The government intends that a new merged scheme will be based on the research and development expenditure credit scheme as much as possible. 

The UK’s productivity growth has slowed since the global financial crisis and lags behind comparable economies – particularly when looked at from a multifactor perspective, which explains almost all of the productivity gap with the US. 

Analysis from the OECD shows a link between overall R&D levels and productivity levels across global economies. The government is committed to investing in R&D to drive productivity growth in the UK, and businesses can help by investing more in R&D. R&D tax reliefs have an important role to play in driving productivity in a fiscally sustainable way for the taxpayer. 

Once the government has decided whether or not to merge schemes and the potential design of the single scheme, a final rate – which will not be consulted on – will be decided and announced at a future fiscal event.

It is currently the government’s intention that, if implemented, the new scheme will be in place for expenditure incurred from 1 April 2024. 

This consultation invites views on the design of a potential single R&D tax relief scheme, particularly from accountants informed by experience with the existing R&D schemes.

ACCA would like to hear your thoughts about the draft guidance and to collate these for a substantive response to HMRC. Please do send any comments to ukpolicy@accaglobal.com by 17 February so that we can respond on behalf of members by the deadline of 13 March.