Budget 2020: Government set to increase investment in R&D
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
FURTHER R&D TAX ADVICE
CONTACT US FOR FURTHER INFORMATION, OR TO REVIEW YOUR R&D CLAIM.
PARMINDER CHATTHA
Partner - Corporate and R&D Tax
Parminder specialises in Research & Development Tax Credits, leading the R&D department at Jeffreys Henry LLP. Since joining the Firm in 2015, he has been working closely with both SMEs and large businesses to analyse and maximise their Research and Development claims. He has so far secured over £70 million in R&D tax relief and credits for our clients.
KATE GREENHOUGH
R&D Director
Kate is a CTA qualified tax specialist with significant R&D tax experience. Kate has over 10 years of specialist experience in advising start-ups to PLC analyses, preparing and submitting robust R&D tax relief claims and Patent Box claims in line with the latest HMRC guidance. Her sector experience spans FMCG (fast-moving consumer goods), automotive, financial services, healthcare, manufacturing, construction, and food and drink.
