NEWS

26th November 2025

The headline message from the Chancellor in this November’s Budget is that the government is adhering to its commitment in the Corporate Tax Roadmap not to change the scope of R&D allowances. Following the last change announced by the government in 2024 to introduce the merged R&D tax relief scheme, the Budget statement provided the welcome confirmation of stability in the scheme for the foreseeable future.

In other related announcements, the Chancellor confirmed an increase in tax on dividends effective from April 2026. With respect to the inclusion of payroll costs in R&D tax relief claims, this may make it more tax efficient, in some circumstances, for directors to consider a PAYE salary in lieu of dividend payments. Companies are advised to discuss this with their accountants when setting their payroll plans for the next tax year.

Garry Hague, Managing Director at R and D Tax Specialists, said: “Following the introduction of a range of changes to the R&D tax relief scheme over the past few years, and the introduction by HMRC of enhanced compliance measures, it is clear that the administration of the scheme has now settled down and it will remain in place with the present arrangements for the foreseeable future.

“For companies undertaking qualifying R&D activities, this scheme remains an attractive government measure for supporting business and increasing competitiveness. Companies undertaking qualifying R&D should not be reluctant to claim.”

“We are happy to provide a no obligation assessment of a company’s viability for making a successful claim, and we can assist with all aspects of the work to complete a claim.”

Please contact us on 01327 317947 / info@randdtaxspecialists.co.uk

25 November 2025

The merged R&D expenditure credit (RDEC) and enhanced R&D intensive support (ERIS) schemes, effective for accounting periods beginning on, or after, 1 April 2024, are now coming into play as companies with affected year ends begin to progress their claims. The new schemes represent a significant change to R&D tax incentives and replace the old RDEC and small and medium-sized enterprise (SME) schemes. The expenditure rules for both are the same, but the calculation is different.

The merged scheme (new RDEC) is similar to the previous RDEC scheme with 20% of R&D spend as a tax credit. The new scheme introduces limitations on overseas expenditure on EPW and subcontracted R&D, and it aims to target the R&D relief to the company making the decision to carry out R&D and bearing the risk. Restrictions for subsidised expenditure are removed.

The R&D Intensive scheme (ERIS) applies to SME companies spending more than 30% of total expenditure (including any connected companies) on qualifying R&D and having a tax loss before the R&D enhancement. Under this scheme, companies can claim an 86% uplift and a payable credit of 14.5%.

Garry Hague, Managing Director at R and D Tax Specialists, said: “The new merged scheme represents a major change to R&D Tax relief and introduces a number of important revisions. Recognising HMRC’s enhanced compliance regime, and the complexity of the requirements, it’s important for qualifying companies to obtain the correct advice before progressing claims. We are happy to provide a no obligation assessment of a company’s viability for making a successful claim, and we can assist with all aspects of the work to complete a claim.

Please contact us on 01327 317947 / info@randdtaxspecialists.co.uk.

8 August 2023

As part of the last Autumn Statement, the government committed to increasing public expenditure on R&D to £20 billion per annum by 2024 to 2025. This represents a cash increase of around a third and is the largest ever increase in the public R&D budget over a Spending Review period.

As part of the latest reforms, the government confirmed that, for R&D Tax Credit claims for accounting periods from 1 April 2023, the small and medium enterprise (SME) additional deduction rate for R&D Tax Credit claims will reduce from 130% to 86%, and the SME payable credit rate will decrease from 14.5% to 10%.

At the same time, the rate for the Research and Development Expenditure Credit (RDEC), under which larger companies apply, will increase from 13% to 20%.

Improvements in the range of costs that can be claimed were also announced.  For example, cloud computing costs, including storage and data licence costs, can now be claimed.

Other important changes, effective from 8th August 2023, are as follows:

Advance Notification Process — For all new claims, and for companies that have not claimed for 3 years or more, for accounting periods commencing on, or after, 1 April 2023, HMRC will require the completion of a new online form notifying of a company’s intention to file an R&D Tax Credit claim.

Additional Information Form — For all claims submitted from 8 August 2023, HMRC have introduced a new requirement for companies to complete an additional on-line information form before their R&D claim, and associated Corporation Tax Return, are submitted.

Garry Hague, Managing Director of R and D Tax Specialists, commented: “The fundamentals of the scheme remain largely the same and it is still a very worthwhile source of funding for companies that are undertaking R&D work to develop their products, processes, or systems.

“These latest changes reflect a greater focus on ensuring compliance by HMRC and we welcome the additional rigour. We have reviewed the additional requirements in detail and, when we commence the claim process with our clients, we will discuss the changes with them to capture the additional information required in the most efficient way, and ensure that claims submitted meet HMRC’s enhanced criteria.”

We are happy to answer any questions that clients, or others, might have on the latest changes, or on the overall R&D Tax Credit scheme.

Please contact:

Garry Hague

Managing Director

R and D Tax Specialists Limited

M: 07717 811547

E: garry@randdtaxspecialists.co.uk

W: randdtaxspecialists.co.uk

29th November 2022

The government’s Autumn Statement revealed a number of upcoming changes to the R&D Tax Credit scheme. The key changes that were announced by the Chancellor included:

• All R&D claims will need to be submitted digitally to HMRC.
• The current SME relief uplift of 130% will decrease to 86%.
• The tax credit refund rate will be reduced from 14.5% to 10%.
• The RDEC scheme rate (larger companies) is going up from 13% to 20%.
• Overseas sub-contracting costs will not be allowed as qualifying expenditure.

Changes to the SME scheme were made largely in response to reports of abuse and fraud that have recently surfaced. The changes are expected to become effective for financial years commencing from April 2023.

In addition to these changes, the Chancellor said that, ahead of the next Budget, the government will work with industry to understand what further support R&D intensive SMEs may require. Earlier this year, in the spring statement, the government pledged an increase in R&D funding to £20bn by 2024/5.

Garry Hague, Managing Director of R and D Tax Specialists, commented: “It is obviously disappointing that alleged abuse of the scheme by a small minority has resulted in these changes to what is a very successful business support scheme.  In the short term, the changes will not affect any current claims, and will likely only come into play for financial periods occurring after 1^st April 2023.

“Whilst there will be a reduction in the size of claims following these changes, the scheme will continue to provide essential funding to businesses engaged in R&D work, and we implore companies to continue to claim.  At the same time, with HMRC’s focus on eliminating fraud in the scheme, we  encourage companies to partner with a bona fide specialist in the R&D Tax Credit scheme to ensure claims made are fully compliant with HMRC’s requirements and the law.

“With more than 10 years’ experience in the scheme, R and D Tax Specialists are happy to provide a no obligation assessment of a company’s validity to claim and we provide a complete end-to-end service for preparation and submission of claims.”

13 April 2022

Scotland has seen a boost in research and development spending and space jobs resulting in Scotland now accounting for a fifth of the UK space workforce industry.

The UK’s first vertical small satellite launches are set to take place from Scottish spaceports including the construction of a spaceport in the far north of Scotland in Shetland and a spaceport near Tongue in Sutherland.

The UK Space Agency said Scotland was “leading the way” in space sector growth.  It said spaceports were likely to lead to further jobs in the coming years, fuelled by the growth of regional space clusters, international investment, and emerging technologies.

UK Science Minister, George Freeman said the employment boost in the space sector was “promising in the face of global economic headwinds”. He said: “We’re backing this innovative and resilient industry through the largest ever increase to research and development spending, which includes a significant uplift to the UK Space Agency’s budget, and the delivery of the UK’s first National Space Strategy.”

https://www.bbc.co.uk/news/uk-scotland-scotland-business-61081756

10 April 2022

The UK’s aerospace technology research programme is set to receive record levels of government funding.

The UK’s Aerospace Technology Institute (ATI) is set to receive record levels of government funding. ATI is set to receive £685 million in funding over the next three years, from 2022 to 2025, which is an increase of over 50% from previous years.

This funding will drive forward the research and development of the green aviation technology industry by helping to capitalise on the UK’s world leading R&D system and support the development of xero-carbon and ultra-low-emission aircraft technology.

In addition to supporting the UK in advancing new green technology, the investment will also bring about the creation of tens of thousands of jobs.

Previous projects that have benefitted from this funding include ZeroAvia’s 6-seat hydrogen-electric aircraft as well as Roll’s-Royce’s UltraFan, the largest and most efficient aircraft engine ever.

R and D Tax Specialists have extensive experience working with clients within aerospace and green technology including…’project disciplines’

https://www.gov.uk/government/news/green-aerospace-tech-to-receive-record-government-funding

6 April 2022

Nearly half a million UK businesses will benefit from a tax cut worth up to £1,000 from April 2022.

The Chancellor, Rishi Sunak announced in the Spring statement that this tax cut will help half a million businesses thrive and grow to support economic recovery.

The Employment Allowance has risen from £4,000 to £5,000 allowing small companies the ability to claim up to £5,000 of their National Insurance Contributions (NICs) bills.

94% of businesses benefitting from the £1,000 increase are small micro businesses in scientific and technical activities industries, construction sector and wholesale and retail.

The Employment Allowance change is just one of a number of measures on offer to spur business growth, including the tax regime for innovation. The government aims to ensure the R&D Tax Credit Scheme is globally competitive and properly incentivises higher business investment in R&D, with further plans to be set out in the Autumn.

https://www.gov.uk/government/news/tax-cut-worth-up-to-1000-for-half-a-million-small-businesses-starts-today

5th April 2022

In April 2022, R and D Tax Specialists’ Alex Lawson ran the Paris Marathon in aide of Unite Against Cancer (UAC). The charity was founded by a close friend in 2012, inspired by Christopher Smith who passed away, after a 2-year battle with osteosarcoma at the age of just 17.

Osteosarcoma is a rare type of cancer that affects bone and is more common in older children and teenagers; the causes for this particular type of cancer are poorly understood.

UAC is a Scottish registered charity that raises money to support individuals fighting cancer, fund research into new cancer treatments, raise awareness of this rare cancer type and promote strategies for cancer prevention.

The funds raised by Alex in his effort to complete the marathon will contribute towards training cancer scientists. ‘The Christopher Douglas Smith Postgraduate scholarship’, founded by UAC, provides a fully funded scholarship for the Masters in Cancer sciences postgraduate programme at the University of Glasgow. The programme enables students to work within a multidisciplinary environment of world-leading scientists and cancer specialists to address the latest challenges in cancer diagnosis, research, and treatment.

For more information on the charity and the work done at the University of Glasgow please visit: www.uniteagainstcancer.org or if you want to support Alex in fund-raising you can at: https://www.justgiving.com/fundraising/alex-lawson4

29th March 2022

In a further boost to R&D funding, the UK government has announced a £39.8 billion R&D budget for 2022 – 2025, the largest research and development budget the UK has seen to date.

The budget is to be allocated across the Department for Business, Energy, and Industrial Strategy (BEIS) with R&D spending set to increase by £5 billion to £20 billion per annum by 2024/2025. This is a 33% increase which will fast track UK research and development.

The investment will see a boost across R&D related industry sectors throughout the UK, including a boost in public R&D investment outside the greater South-East. These regions are set to receive at least 55% of the BEIS R&D budget by 2024/2025.

The government’s R&D investment plans, combined with its R&D Tax Credit scheme, will further support businesses investing in innovation and technical development. Research shows that every £1 of public expenditure in R&D eventually leverages an average of £2 of additional private investment.

https://www.gov.uk/government/news/government-announces-plans-for-largest-ever-rd-budget

24th March 2022

In the Chancellor’s 2022 Spring Statement, Rishi Sunak responded to feedback in relation to the proposed changes to R&D tax relief, indicating that the scope of R&D is to set to expand to cover data and cloud computing costs. More specifically the Chancellor outlined that all cloud costs which facilitate R&D activities, including storage, will become eligible in 2023.

This will also cover dataset licence payments for any qualifying R&D project, staffing costs to collect, cleanse and analyse data for R&D, as well as attributed software costs. Additionally, pure mathematics will also be covered.

The prospect of restrictions on overseas R&D will go ahead in 2023; however, the government stated it is aware there are cases that require R&D to occur overseas and acknowledged key exceptions where it is necessary for R&D activity to be completed outside the UK. This includes material factors for research subjects located outwith the UK and instances where R&D activities are required to take place outside the UK for legal reasons.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1062486/Spring_Statement_2022_Web_Accessible.pdf