George Osborne announced today that he is increasing the rate
of R&D tax relief for both SMEs and large companies. The new rates, which
will apply to expenditure incurred on or after 1 April 2015, are 230% for SMEs
(up from 225%) and 11% for large companies claiming the R&D Expenditure
Credit (up from 10%).
HMRC’s overview of the Autumn Statement announcements also
mentions a couple of other proposed changes to the R&D regime.
New rules will be introduced to restrict qualifying
expenditure so that the costs of materials incorporated into products that are
sold are not eligible for relief. Again, this will apply from 1 April 2015.
This seems likely to extend on restrictions for R&D in “production” already
included in HMRC’s Corporate Intangibles Research & Development (CIRD)
An advance assurance scheme for small businesses making
their first claim to R&D tax credits will be introduced along with new
guidance. This sounds like it may be a follow on from a pilot that was run in 2011. If so,
that scheme only applied to companies with fewer than 50 employees. The Government
also intends to launch a consultation in January 2015 on the issues faced by
smaller businesses when claiming R&D tax credits.

Of course, there is the small matter of an election in May 2015
so it will be interesting to see how these proposals fare in any rush to get a
Finance Act passed before that date.