Additional Clarity on R&D Reliefs

Due to the complexity of the rules around R&D reliefs, many companies do not know at the point of making an R&D investment whether the costs will qualify for R&D relief. This can lead to no claim being made, or a claim being made that doesn’t qualify.

HMRC already offer voluntary advance assurances to businesses to help them have more certainty about their claim. However, this service is not commonly used.

The government is consulting on widening the use of ‘advance clearances’ to try and make them more useful and reduce errors and fraud. One aspect being considered is whether to make assurances mandatory in certain areas – particularly those where HMRC feels the risk of an incorrect claim is high.

The consultation also considers whether there should be a minimum expenditure threshold before R&D relief can be claimed. In the past, a £25,000 threshold has been used.