HMRC is currently consulting on a proposed change to the R&D tax relief for SMEs to minimise abuse of the regime.
The changes should not impact most companies based on the draft proposals and discussions we have been having, which is good news.
In summary, HMRC propose that repayable R&D credits in excess of £20k will be restricted by three times the company’s PAYE/NIC liabilities for that accounting period.
HMRC propose a further concession where claims would not be capped where certain positive hallmarks are met. The consultation suggests these would be where a company:
- actively manages its intellectual property and
- where payments to related parties for subcontracted R&D are not more than 10% of the total claim.
The deadline for responding is 28 May 2020.
Get in touch if you have any questions or feel you would like to submit a response to HMRC as part of the Condoc and we would be happy to help.
