Research: Tax Allowances

(asked on 11th September 2024) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will take steps improve accessibility for high-growth SMEs to the research and development tax credit system.


Answered by
James Murray Portrait
James Murray
Exchequer Secretary (HM Treasury)
This question was answered on 7th October 2024

The Government recognises the important role that R&D plays in driving innovation and economic growth as well as the benefits it can bring for society. The UK’s R&D tax reliefs have a key role to play in supporting R&D investment in a fiscally sustainable way.

R&D intensive, lossmaking, small and medium-sized companies (SMEs) qualify for an enhanced rate of relief (“ERIS”). This gives eligible companies a cash value of £27 for every £100 spent on R&D. The Government expects around 20,000 SMEs annually will benefit from this support, which is worth around £600 million per year.

To give additional certainty and assure compliance HMRC offers an Advanced Assurance scheme to eligible SMEs (companies with a turnover of below £2 million and less than 50 employees) claiming R&D tax relief for the first time.

To further support accessibility, HMRC publishes comprehensive guidance and has produced new “guidelines for compliance” explaining what is and is not R&D.

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