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It might seem like only yesterday, but the Merged R&D tax relief scheme is nearly two years old.
As it has now been some time since that major upheaval, it is natural to wonder what the future might hold.
The Spring Statement is coming soon and it is worth reflecting on whether this is likely to impact R&D tax reliefs.
Are R&D tax reliefs likely to change?
Although there are currently no concrete plans to change R&D tax reliefs, it is not entirely outside the realm of possibility.
The reason why changes cannot be confidently ruled out is that the impact of HMRC’s expert advisors remains to be seen.
The panel is expected to meet quarterly, so if a meeting has not already taken place, then it may take place soon.
With it being so close to the Spring Statement, it is possible that any findings or insights from the panel could be reflected in policy announcements.
The UK is currently experiencing a shift in how it is viewed on an international level when it comes to R&D.
Research agreements have resulted in some sectors being uplifted as international cooperation allows UK businesses to pull their weight.
However, the reduction in the presence of major innovators like those in the pharmaceutical sector cannot have gone unnoticed by those hoping to make the UK an R&D powerhouse.
This may cause official policy and guidance to change in order to make the UK more appealing to businesses that are currently electing to take their R&D elsewhere.
What will the future of R&D tax relief look like?
One thing that is certain is that compliance measures will continue to be rigidly enforced.
The fact that the number of R&D tax relief claims submitted fell while the value remained the same shows that quality is being cultivated through the current system.
There is a concern that some initiatives, like Advanced Assurance or the online eligibility checker, will give people false hope about submitting ineligible claims and this could lead to a further tightening of compliance measures.
However, it can be hoped that if any failings are directly linked to specific initiatives, those initiatives are dealt with accordingly.
In the meantime, accountants and innovative businesses should continue working within the current guidelines.
As R&D tax consultants, we are watching the state of R&D in the UK with great interest and will draw your attention to any changes as they happen.
We are keen to work alongside you to better enhance the quality of R&D tax relief claims, changes which may make future reforms unnecessary.
Get in touch today to face the future of R&D tax relief claims with confidence.
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