R&D Tax credits – HM Treasury publishes latest response and further consultation
The Government has now published its response to the first consultation on R&D tax relief in November 2010. You may recall that HMRC, HM Treasury and BIS held a workshop in Cambridge at SJIC as part of the initial consultation process that was well attended by local technology companies.
A number of the improvements suggested in the consultation process for SMEs were incorporated in the Budget 2011 announcement, not least the increase in the amount to be claimed from an additional 75% of qualifying expenditure to an additional 100% from 1 April 2011, and for an additional 125% from 1 April 2012.
The removal of the PAYE & NIC cap from 1 April 2012 will also enable SMEs who have a lot of R&D spend in comparison to the amount of salaries paid to receive the full cash benefit of the amount claimed if they are not paying Corporation tax. For micro technology businesses the removal of the £10,000 de minimis spend before qualification will also provide a source of additional finance.
We have provided a more detailed commentary of the announced and proposed changes on our website. Please click here for access.
Our view
In our view the continued consultation, and the fact that the Budget included a real demonstration of the desire to listen to the consultation responses on a wide range of issues, is a very positive step in ensuring that the R&D tax relief schemes continue to promote companies to carry out additional R&D and help to attract internationally mobile R&D into the UK for the wider benefit.
As specialists in advising on R&D tax relief claims Kingly Brookes will be taking an active part in this process. We will also be representing the views of our clients though our membership of the HMRC R&D Consultative Committee and our membership of the working group set up by HM Treasury to focus on the detailed policy issues resulting from the consultation exercise. We would be happy to meet with you to discuss any thoughts that you may wish to put forward as part of this process and to discuss the potential implications for your current claims. The closing date for responses is 31 August 2011.
Please do not hesitate to contact John Moore on 0207 292 8850 or at [email protected] if you would like to discuss this, or any other aspect of the R&D tax relief regime.
About Kingly Brookes
Kingly Brookes is a firm of chartered accountants based in Cambridge and London specialising in working with technology companies to optimise their claims for R&D tax relief. We combine a deep technical knowledge of the working of the two schemes together with a practical hands on approach to claim preparation proven to optimise your claim potential and ensure certainty over your claim outcome.