HMRC launched their plans for improving access to R&D tax credits for small business on 28 October. To publicise the launch there were tweets (and retweets) from HMRC, HM Treasury and David Gauke (and probably others).
The document – which is actually titled “Making R&D Easier: HMRC’s plan for small business R&D tax relief” – is a response to a consultation that was carried out in January and February of this year. In his March Budget George Osborne promised that HRMC would publish its roadmap for further improvements in this area in “the summer”. OK, we’ve had a General Election in between – and a summer Finance Bill, to be fair – but the end of October is hardly “summer”; I’d almost forgotten that we were expecting it! What’s more, it’s not exactly packed with exciting proposals that might have made it worth waiting for.
This year will see the launch of an Advance Assurance scheme for small businesses – those with a turnover less than £2m and fewer than 50 employees – making their first claim (promised for November) and “improved” guidance on the interaction of grants and State Aid with R&D tax relief claims. In fact, the revised version of CIRD81670 on State Aid was prepared several months ago so I can only assume that HMRC is still waiting for the GDS team to actually publish it on GOV.UK (don’t get me going on that one).
2016 is apparently going to see a lot of “reviewing” and “assessing” of stuff but not a lot in the way of hard deliverables. There will be bespoke guidance on R&D tax relief for SMEs which will “[break] away from the traditional manual format.” Hopefully the GDS team have been forewarned so that they can fit it into their hectic schedule and ensure it gets published on GOV.UK in a reasonable time frame.
What is a real shame, however, is that the review of the SME subcontracting rules is not slated to take place until at least 2017. This is an area that really does need looking at and I can see no sensible reason why this should not be started much sooner.
Ultimately, this document leaves me feeling quite disappointed; it feels rather superficial, almost as if the authors scrabbled around for something to put into it. Which is a real shame because there is actually quite a lot that the Government and HMRC could be doing to help smaller businesses benefit from R&D relief.