Policy paper

Additional tax reliefs for research and development (R&D) intensive small and medium-sized enterprises and potential merged R&D scheme

This measure is about additional tax relief for Research and Development (R&D) intensive small and medium-sized enterprises and a potential merged R&D scheme.

• From: HM Revenue & Customs
• Published: 18 July 2023

Documents

Research and Development reform — Consultation on a single scheme

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Additional tax relief for Research and Development intensive small and medium-sized enterprises

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Draft legislation

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Draft legislation (accessible version)

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Explanatory note

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Explanatory note (accessible version)

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Details

The government has published draft legislation which will introduce a new permanent rate of relief for the most Research and Development (R&D) intensive, loss-making small and medium-sized enterprises (SMEs) from 1 April 2023.

This additional support will be worth over £1.8 billion over the next 5 years and will provide eligible R&D intensive loss-making SMEs with support worth £27 per £100 of R&D expenditure. The scheme would continue to operate alongside any merged scheme.

The government has also published draft legislation on the proposed design of a merged R&D scheme. A merger would be a significant opportunity for tax simplification, provide more clarity and certainty to SMEs, and help to drive innovation in the UK. The government has not yet taken a decision on whether to merge and intends to keep open the option of doing so from 2024.

Published 18 July 2023