New regulations and draft legislation have been released by the Government, some of which come into force from August.
These new R&D regulations apply from 8 August 2023 and will impact all companies that carry out Research and Development (R&D) and claim R&D tax relief under either of the two schemes — the Research and Development Expenditure Credit (RDEC) and the small or medium enterprises (SME) R&D relief.
The regulations specify the information to be provided by companies in support of their claims to R&D. They also introduce a requirement for digital filing of all amendments to Corporation Tax Returns where the Corporation Tax Returns contain a claim to one of the R&D tax reliefs. The digital filing requirement does not extend to customers who have statutory protections allowing for provision of paper returns.
The Government have stated that these more extensive measures aim to tackle high levels of fraud within R&D claims.
While the regulations will have effect for claims to Research and Development relief submitted from 8 August 2023, customers who are already exempted from the requirement to file digital returns will not be affected by the new requirement to submit digital amendments to Corporation Tax Returns that contain R&D claims.
For full information, refer to this link. If you wish to contact HM Revenue & Customs with any questions, use the following contact information: Telephone: 03000 592 504 or 03000 586 834 or email: yasmin.achha@hmrc.gov.uk or david.harris@hmrc.gov.uk.
In other R&D-related news, the Government has published draft legislation on the proposed design of a merged scheme, alongside a summary of responses to the consultation. This would combine the SME and RDEC schemes into a single, simplified above-the-line tax credit. This legislation will keep open the option of implementing a merged scheme from April 2024. A final decision on whether to merge schemes will be taken at a future fiscal event.
