The following changes to the R&D SME tax relief are set to come into effect for accounting periods beginning on, or after, 1 April 2021:
- A cap on the amount of the payable R&D tax credit will be introduced
- A company making a small claim for payable credit below £20,000 will not be affected by the cap
- A company will be able to include related party PAYE and NIC liabilities attributable to the R&D project when calculating the cap and these will be subject to the 300% multiplier
- A company’s claim, of any size, will be uncapped if it meets two tests. These tests require that a company’s employees are creating, preparing to create, or actively managing Intellectual Property (IP) and that its expenditure on work subcontracted to, or externally provided workers provided by, a related party is less than 15% of its overall R&D expenditure
We continue to assist our clients to claim this valuable tax relief on eligible activities. Should you have any queries regarding the scheme or wish to discuss the possibility of an R&D tax claim for your business, call us on 01249 712074.