The UK government’s Autumn 2022 Budget is going to affect Research and Development (R&D) tax credits. As a business owner or a financial manager, you need to know what to expect.
R&D tax credits are tax incentives provided by the government to businesses that invest in R&D. They help reduce tax liabilities and provide cash refunds. But the government has recently made changes to ensure that these incentives are used more effectively.
One of the changes is the introduction of a cap on the amount of payable tax credit that a company can receive each year. If you don’t have a significant payroll or NICs liability, you may see a reduction in the amount of payable tax credit you can claim.
Another change is the restriction on the amount of R&D tax credits that can be claimed on subcontractor costs. From April 2023, you can only claim R&D tax credits on 50% of your subcontractor costs, down from the current limit of 65%. This change will affect companies that rely heavily on subcontractors for their R&D work.
Finally, the government will review the R&D tax credit scheme to ensure that it’s meeting its objectives effectively, especially for small and medium-sized enterprises (SMEs).
In summary, you need to expect changes to R&D tax credits in the Autumn 2022 Budget. These changes may have a significant impact on your business, so it’s crucial to stay up to date with the latest developments to maximize your claim for R&D tax credits.