Jeremy Hunt Autumn 2023 statement
Many listeners around the UK were keen to hear what the Chancellor was announcing during his Autumn statement in the House of Commons. After the huge swing in budget changes and furlough schemes from the Covid pandemic, energy crises and the soaring cost of living prices, there was plenty to discuss.
As claimed by the Chancellor, rather than a recession the economy has grown. The big talking points in his speech being the cuts in National Insurance contributions, cuts in benefits and increase in state pensions.
The speech rolled on and Jeremy Hunt spoke specifics. Then came the statement around R&D Tax Credits…
The government recognises the important role that R&D plays in driving innovation and economic growth as well as the benefits it can bring for society. The UK’s R&D tax reliefs have a key role to play in supporting R&D investment in a fiscally sustainable way. The Autumn Statement announced reforms to the R&D tax reliefs to simplify and improve the system.
There will be a merge of the two current schemes in place. The Research and Development expenditure credit (RDEC) and the small and medium-sized enterprise (SME) incentives scheme.
Combining the two schemes was first mentioned in the March 2021 R&D Tax Reliefs consultation. Autumn Statement 2022 announced various changes to the rates of relief, heralding these changes as a “step towards a simplified, single RDEC-like scheme.”
A short consultation followed in January 2023. However, at the Spring Budget 2023, it was announced that a higher R&D tax credit rate under the SME regime would be retained for loss-making R&D intensive companies.
Now the new format of the combined schemes will take effect in April 2024. This will likely represent a delay to most claimants, many likely argue it is not sufficient time to properly manage the impact of these changes. For accounting periods beginning on or after 1 April 2024 there will only be two R&D schemes available:
1. The Merged Scheme
2. SME Intensive Scheme
With changes coming into place, there is now a desire to contact professionals in this field. Companies that are up to speed with the latest legislation and know the R&D process inside out. The Momentum Group is a multi-award-winning UK based R&D Tax Credit Consultancy firm.
Contact us today if you feel you would like to explore what this means to you, or if you would like a second-opinion on a claim you have previously filed.