Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the potential impact of requiring independent attestation by a qualified competent professional for all Research and Development tax relief claims above a specified threshold; and what consideration they have given to introducing a requirement such as a condition of eligibility.

The Government recognises the importance of research and development (R&D) in driving innovation, and the benefits it can bring for society. By incentivising R&D, tax reliefs can play a vital role in the Government’s mission to boost economic growth.

R&D tax reliefs are delivered as part of the Corporation Tax self-assessment process. This requires claimant companies to assess their own entitlement. HMRC has produced specific guidance to assist claimants to make that assessment. This includes discussion on the importance of being able to substantiate the advance in science and technology sought, and how that can be aided by the involvement of a qualified competent professional.

The Government is committed to responding to stakeholder feedback and enhancing the administration of R&D tax reliefs. To support this, HMRC published a consultation on 26 March to explore widening the use of advance clearances in the reliefs to help further reduce error and fraud, while also improving the customer experience and providing certainty to businesses.

The Corporate Tax Roadmap confirmed HMRC will establish an R&D expert advisory panel and HMRC launched recruitment for the panel on 6 May. The panel will work with HMRC to improve the functioning of the R&D tax reliefs system by increasing clarity of guidance for claimants and enhancing HMRC’s understanding of innovation and developments across key growth sectors which will assist in its assessment of R&D claims.

The Government will continue to consider longer term simplifications and incremental improvements to the effectiveness of the reliefs.