Draft guidance: Research and Development (R&D) tax reliefs
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Detail of outcome
At Budget 2021, the government announced a review of the Research and Development (R&D) tax reliefs with the objectives of ensuring that the UK remained a competitive location for cutting edge research, that the reliefs continued to be fit for purpose, and that taxpayer money was effectively targeted.
HMRC published draft guidance in December 2022 ahead of the implementation of reforms to the R&D tax reliefs. The guidance clarifies technical aspects of how the reforms will work in practice, when they will take effect and includes a list of the additional information that will be required for claims. We welcomed comments from any individuals or organisations who make use of or provide tax agent services for R&D tax reliefs.
The government is grateful for the 63 responses received. Those responding included individuals, industry groups, businesses, accountants, agents and accountancy professional bodies. By taking into account the feedback received from stakeholders in response to the draft guidance, we were able to integrate changes that have enhanced the overall quality of the guidance.
The updated guidance, made available here for reference, will be formally published as part of the Corporate Intangibles Research and Development Manual once the Finance Bill receives royal assent in summer 2023.
Original consultation
Consultation description
HMRC has published draft guidance ahead of the implementation of reforms to the Research and Development (R&D) Tax Reliefs on 1 April 2023. This guidance clarifies technical aspects of how the reforms will work in practice and includes a list of the additional information that will be required for claims. Several of the clarifications have been made thanks to stakeholder feedback.
At Budget 2021, the government announced a review of the R&D tax reliefs with the objectives of ensuring that the UK remained a competitive location for cutting edge research, that the reliefs continued to be fit for purpose, and that taxpayer money was effectively targeted. Several reforms have since been announced, including bringing pure mathematics research within scope of the reliefs, including data and cloud computing as qualifying costs, restricting expenditure on some overseas R&D activities and a package of measures to target abuse and improve compliance. Draft legislation for these measures was published for comment on 20 July 2022 and final legislation will be taken forward in the Finance Bill next year.
As part of our ongoing commitment to stakeholder engagement to ensure the guidance is as helpful as possible, we welcome comments from any individuals or organisations who make use of or provide tax agent services for R&D tax reliefs.
Documents
Updates to this page
Published 20 December 2022Last updated 18 April 2023 + show all updates
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Added details of consultation outcome.
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First published.