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Research and Development Tax Reliefs

Author: Maria Kitt

Edition: Fourth

Publication Date: May 2022

Publisher: Bloomsbury Publishing Plc

Law As Stated At: 24 February 2022

Research and Development Tax Reliefs

Research and Development Tax Reliefs

UK R&D tax reliefs are among the most effective and generous tax allowances in the world. Yet many companies, entitled to the incentive, do not claim reliefs that are due, either through a lack of awareness or because the reliefs seem complex or inappropriate to their business. But the significant increases in the value of the incentive make the R&D tax relief even more important. At the same time, the growth in HMRC powers and penalty-based tax regime highlight the importance of accurately documented claims.

This commentary is up-to-date as of Finance Act 2022 and draws together the many strands of legislation and other requirements that should be noted when making a competent claim into a single reference point.

Research and Development Tax Reliefs has been updated to include:

  • Coverage of key reforms to the SME scheme (4.38)
  • Discussion of proposed key changes to subcontracting costs to encourage innovation within the UK (4.3)
  • Updated to cover the extended definition of costs eligible for R&D - now to include the costs of cloud computing & data set costs (4.46)
  • Coverage of changes to be made to the administration of claims and linked CT600 returns to improve compliance and close areas of risk (6.27)
  • New case summaries including HMRC V Quinn London Ltd concerning SME ‘subcontracting’ reliefs (6.41)

Author Biography

Maria Kitt is Corporate Tax Partner at Tax Insight UK, and a consultant at STEM Tax Ltd. Based in the UK Science Park community at Surrey Research Park, she has advised innovative companies on corporate intangible asset reliefs for the past 30 years. This has included advising both ‘hard tech’ science & technology companies and service sector companies engaged in R & D cycles in outside industry, particularly those involved in complex construction and engineering sectors as well as digital infrastructure companies.