The Chancellor’s Budget speech was full of references to investment in new technologies and innovation, and included some significant commitments to funding research in a range of sectors and industries, all of which can only be positive for the state of UK innovation.
R&D tax credits featured too, and from 1 April 2020, companies claiming under the large company (RDEC) scheme will see an increase in the rate of relief from 12 per cent to13 per cent.
For SMEs, the anticipated reintroduction of the PAYE cap has been delayed until 1 April 2021 and - subject to further consultation - will be introduced at a level of 3 times the relevant total PAYE and NIC bill. This is a welcome reaction from HMRC to lobbying by the adviser community - including RSM - to ensure that the measures achieve their aim of countering abuse, without disadvantaging genuine claimants including small businesses with low payroll bills.
Finally, HMRC has announced that it will consult on the extension of the scope of R&D relief, to include expenditure on data and cloud computing – again a welcome announcement following lobbying from businesses and the adviser community.
The big opportunity missed, was that there was no increase to the SME scheme which we would have liked to have seen. Instead, the focus was on large companies.
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