HM Revenue & Customs draft guidance: Research and Development (R&D) tax reliefs

HMRC has published draft guidance ahead of the implementation of reforms to the Research and Development (R&D) Tax Reliefs on 1 April 2023. This guidance clarifies technical aspects of how the reforms will work in practice and includes a list of the additional information that will be required for claims. Several of the clarifications have been made thanks to stakeholder feedback.

At Budget 2021, the government announced a review of the R&D tax reliefs with the objectives of ensuring that the UK remained a competitive location for cutting edge research, that the reliefs continued to be fit for purpose, and that taxpayer money was effectively targeted. Several reforms have since been announced, including bringing pure mathematics research within scope of the reliefs, including data and cloud computing as qualifying costs, restricting expenditure on some overseas R&D activities and a package of measures to target abuse and improve compliance. Draft legislation for these measures was published for comment on 20 July 2022 and final legislation will be taken forward in the Finance Bill next year.

As part of our ongoing commitment to stakeholder engagement to ensure the guidance is as helpful as possible, we welcome comments from any individuals or organisations who make use of or provide tax agent services for R&D tax reliefs.

The formal consultation can be accessed below. If you have any views that you would like to share to inform a potential CIOB response then please email [email protected]. Please not that consultation closes on 28th February 2023.