The government will increase investment in science, innovation and technology to £22 billion by 2024-25, with £900m in nuclear fusion, space and electric vehicles. This takes public spending on R&D to 0.8% of GDP.
From 1 April 2020, the rate of R&D Expenditure Credit (RDEC) will increase from 12% to 13%, increasing the value of the R&D claim for your business. RDEC is claimed by large companies and SMEs who are unable to receive relief under SME R&D tax credits due to having received some form of government grant funding.
In the 2018 Autumn Budget, the government announced that it will re-introduce a PAYE and NIC cap on the SME payable credit to address potential abuse of the relief. For accounting periods beginning on or after 1 April 2020, the maximum payable R&D tax credit a company can claim would be set at 300% of the company’s total PAYE and NIC liabilities for the period. Following consultation last year, the government has now decided to delay the introduction of the cap until 1 April 2021.
The government will also consult on whether expenditure on data and cloud computing should qualify for R&D tax credits under the SME and RDEC schemes.
Read more about R&D Tax Relief
Partner - Corporate and R&D Tax