Changes to R&D Tax Credits in April 2023

Did you know that we help businesses of all shapes and sizes to reduce their tax bills through R&D Tax Credits? If you carry out any type or scale of research and development, chances are you can claim tax relief under this government scheme and make huge savings. However, next year (2023) will see some changes made to the R&D Tax Credits system, which we’ve outlined below. 

As mentioned in the Autumn 2021 Budget, R&D Tax Credits will take a different approach from 1st April 2023. These changes are being put in place to modernise the system by extending tax relief to cloud computing costs, refocusing the nature of the incentives, and improving compliance by deterring errors and fraudulent activity. As such, the changes will prove positive for certain businesses whilst reducing the amount that others can claim. 

As R&D Tax Credits currently stand, research and development carried out overseas can be recharged to a UK claimant company. From 1st April 2023, this will change so that the R&D needs to physically take place within the UK. If your R&D is done in another country, such as through your own international group of companies or a third party, you probably won’t be able to claim tax relief on it. 

On a more positive note, from April 2023 your business will be able to claim R&D Tax Credits on costs related to cloud computing and data. If you pay license fees for renting cloud computer storage space or purchase data that’s used for R&D purposes, these costs can be claimed against. 

Due to numerous fraudulent claims being made for R&D Tax Credits over the years, as well as multiple errors, the government is also making the system harder to abuse. To achieve this, from April 2023 all claims will need to be made digitally and the forms will ask for more details than the current system. 

 

The claim will have to be endorsed by a named senior official of your business, as well as naming any agents who have advised you. This is because many people claiming to be R&D Tax Credits advisors actually have no background in tax. (For peace of mind, the tax experts here at TreyBridge Accountants are proficient in tax advisory and tax planning services.) 

Looking for help with R&D Tax Credits or any other kind of tax consultancy and tax planning services? Call our Northern office on 01482 235575, our London office on 0207 885 0605 or fill in the contact form below.