Chancellor Rishi Sunak made announcements on Research & Development (R&D) in his Spring Statement on 23 March 2022, including a future shake-up to reduce abuse.

Where it is necessary for the R&D to take place overseas, the government will legislate so that expenditure on overseas R&D activities can still qualify where there are:

  • Material factors such as geography, environment, population or other conditions that are not present in the UK and are required for the research. For example, deep ocean research.
  • Regulatory or other legal requirements that activities must take place outside of the UK, for example, clinical trials.

The scope of expenditure that will qualify for R&D relief will be widened from April 2023 to include:

  • All cloud costs in respect of the storage of vital data.
  • Mathematical advances, making pure mathematics a qualifying cost.

The Spring Statement has also flagged other changes which are being considered as part of the continuing review of R&D reliefs.

  • Increasing the generosity of the RDEC scheme.
  • Changes to tackle the abuse of the schemes, particularly the SME scheme.
  • Creating a visa regime to enable more highly skilled workers to relocate to the UK.

Legislation is to be published in the summer and further announcements will be made in the autumn.

Useful guides on this topic

R&D Tax Relief: Overview
What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?

Research & Development Tax Reliefs: At a glance
This is a freeview 'At a glance' guide to Research and Development (R&D) relief.

R&D: SME Tax Credit Scheme
What Research & Development (R&D) schemes are available for small and medium-sized companies undertaking R&D? How to make an R&D claim? What are the qualifying costs and how much can be claimed?

R&D: 'Large Company' Scheme (RDEC) Guide
What is the R&D Expenditure Credit (RDEC) Large Company Scheme for R&D relief? How does it work?

External Links

Spring Statement 2022

Spring Statement Tax Plan

R&D Tax Reliefs Report

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