HMRC are presently consulting on improving access to R&D tax credits for the SME Sector.<\/p>\n
Although over 80% of all R&D claims made in 2012\/13 were made by SMEs, that statistic arose because there are considerably more SME businesses than large businesses.\u00a0 The vast majority of the benefit of R&D credits accrued to larger companies.<\/p>\n
HMRC\u2019s consultation concentrates on the process by which claims are made rather than the definition of R&D for the purposes of the credits.\u00a0 HMRC\u2019s consultation therefore covers the following aspects of the claim.<\/p>\n
The consultation is welcome.\u00a0 I have come across cases of clients accepting that they are undertaking R&D, but not appreciating that the tax relief extends outside the traditional pharma industries.\u00a0 This has resulted in a number of clients, in a broad range of sectors, claiming credits in situations that may not be immediately obvious as falling within the tax definition of R&D.<\/p>\n
One of the proposals which HMRC announced in the most recent Autumn Statement is a formal process whereby advance assurance is available to small companies claiming R&D relief for the first time.\u00a0 The aim is to provide certainty as to the availability of the claim and therefore enable businesses to plan their finances more effectively.\u00a0 This takes away the uncertainty experienced by the smaller business about their eligibility for the credits and should allow the business to manage its cash flows more effectively and, hopefully, provide an incentive to undertake even greater levels of R&D.<\/p>\n
Advance clearances in the SME sector are not unusual.\u00a0 For example the Enterprise Investment Scheme manages an excellent advance clearance service which is felt to generate greater levels of third party investment in smaller businesses.\u00a0 I hope that the outcome of the consultation is an advance assurance run along the same lines as that of EIS.<\/p>\n","protected":false},"excerpt":{"rendered":"
HMRC are presently consulting on improving access to R&D tax credits for the SME Sector. Although over 80% of all R&D claims made in 2012\/13 were made by SMEs, that statistic arose because there are considerably more SME businesses than large businesses.\u00a0 The vast majority of the benefit of R&D credits accrued to larger companies.[…] <\/p>\n