Chromosomes on black background cancer cells

R&D tax relief 'single scheme' consultation launched 2023

R&D tax reliefs are very much in the news, due in large part to major changes being made to the schemes by Government. The past decade has seen upheaval in the way the R&D schemes work, including which costs are eligible, complexity around subcontractor costs, and the latest move – Jeremy Hunt's 50% cut in the rate of R&D relief.

This move and other confusing changes have negatively impacted companies in the life sciences/biotech sector in particular, which is why we are seeking your views. In a bid to consolidate these changes, the Government (HM Treasury) has launched a consultation into the merging of the two existing R&D tax relief schemes (RDEC and SME) to provide a 'single, simplified research and development (R&D) relief scheme' – and we'd like to hear your thoughts.

The full consultation document contains 18 questions but here we are gathering views on just two priority areas. We cannot guarantee our input will be taken on board but we are determined to represent our clients by responding to the consultation and ensuring your views are put forward. Below are the two questions we feel are most important at this stage.

  1. The consultation proposes that there could be a higher rate of R&D relief or credit for 'R&D intensive companies'. Do you think that a simple distinction could be made to give higher relief to companies that keep their own R&D-generated intellectual property (IP) within the UK - YES or NO
  2. The single scheme revision is proposed to come into force in April 2024. Given all the other changes still to come into force, do you agree this is too soon to give claimant companies a chance to adapt – YES or NO

We urge you to take a few seconds to email your response.

Do add any further comments you wish – we'd love to hear what you think of the R&D relief schemes overall!

While we will respond on behalf of our biotech clients, you may wish to respond individually too.

You can read the full consultation document here.