R&D success stories: meet the companies claiming back cash
Meet the innovative companies who have successfully recovered money through the SeedLegals R&D Tax Credits service.
R&D tax relief has long rewarded companies that work on innovative projects in the UK.
While that will continue to be the case, from April 2023, there’ll be changes to the cost categories and rate changes for both the SME and RDEC schemes. If you work in a data-intensive industry, this could be good news for you.
There are five cost categories for R&D:
These categories will stay in place, but from 1 April 2023, new criteria apply:
Previously, costs relating to cloud-based technology and data software licences couldn’t be included in an R&D claim.
But for accounting periods starting on or after 1 April 2023, you’ll be able to include these costs in your claim. This is great news for companies who use cloud-based services and rely on data for their research.
Note: This change to qualifying costs for R&D relief is a proposal in the Finance (No. 2) Bill which hasn’t yet been approved by Parliament. We expect it to become law later this year but currently it’s still a proposal.
Previously, activities which relate to pure mathematics weren’t eligible for inclusion in R&D claims.
The government has updated the R&D relief guidelines to expand the definition of ‘science’ to include ‘mathematical advances’ as science. This means that from 1 April 2023, you can claim a proportion of costs relating to pure maths activities – great news for companies doing R&D in quantum computing, deeptech and more.
Subcontracted spend from outside the UK will no longer be eligible for inclusion in R&D claims. The aim of this is to bring more R&D activity to the UK and incentivise companies to move operations into the UK.
Update: In the Spring Budget 2023, the government announced that this change to R&D tax relief rules would come into effect from 1 April 2024. This means companies have more time to find alternatives to hiring non-UK subcontractors.
It’s not just the qualifying costs that are changing. HMRC has also updated the way you need to submit your R&D claim for accounting periods starting on or after 1 April 2023:
For full details about the information you’ll need to include, read the guidance at the HMRC website.
For accounting periods starting on or after 1 April 2023, HMRC has added a new requirement that you must notify them before you make a claim.
You’ll need to fill in an online form to notify HMRC that you intend to make a claim within six months from the end of the accounting period which your claim covers.
This requirement doesn’t apply if you made a claim in one of the three previous accounting periods.
To check if you need to notify HMRC in advance and how to send your notifications, read the detailed guidance at the HMRC website.
Note: This requirement to notify HMRC in advance is a proposal in the Finance (No. 2) Bill which hasn’t yet been approved by Parliament. We expect it to become law later this year but currently it’s still a proposal.
The government announced rate changes to the R&D schemes in the Autumn Statement. These changes were approved by Parliament and became law in January 2023.
The SME R&D scheme benefit for loss-making companies will decrease from a maximum of 33% cash back to 18.6%.
The RDEC rate will increase from 13% to 20%. That means that the overall tax benefit from the RDEC scheme will increase from 10.54% to 16.2%. These changes became law in January 2023.
R&D tax relief remains an important way to ensure that companies are bringing cash into their business and will still remain a valuable growth tool for genuine claimants.
At SeedLegals, we can help you navigate the complex legislation, confirm whether you are eligible to claim and how much you are likely to get back as a reduction in corporation tax liability or a cash credit.
R&D Tax Lead,
In 2021, the government announced a rise to Corporation Tax which comes into effect on 1 April 2023.
The rate rise will hit profit-making companies hardest and make calculating their tax rate more complicated:
For companies making a profit:
Not sure how these changes will affect your business? Need some help with your claim? Book a free call with our R&D experts.
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