Jenny is a director at ForrestBrown and a member of HMRC’s R&D Consultative Committee. She joined us in 2015, having worked in the tax industry for over a decade. A Chartered Accountant and member of the Association of Tax Technicians, Jennifer started her career at KPMG, focusing primarily on corporate tax. In 2013, she joined a consultancy practice where she led a team of R&D tax specialists.
Today’s Spring Budget 2017 didn’t bring with it any big surprises for R&D tax credits. It prompted more questions than it gave answers; here we review what the Chancellor said, and what in our view that means for the R&D tax environment.
At the end of 2016, prime minister Theresa May promised to invest an extra £4.7 billion in research and development (R&D). The government’s intention is to help the UK remain an attractive place for businesses to invest in innovation.
Developing new drugs is one of the biggest areas of research and development (R&D) globally, with large amounts of money invested. It is therefore an area where grants and R&D tax credit claims are used widely. Many companies involved in and around the pharmaceuticals supply chain are carrying out qualifying R&D projects but are not claiming relief. This means they could be missing out on cash that they could spend on further R&D.
Staff costs often play a crucial part in any research and development (R&D) tax credit claim, so it’s not surprising that HMRC expect to see good record keeping. That is usually fine when it comes to payroll costs, but it might be trickier when it comes to looking at what time employees spend on individual tasks.
According to Kantaar WorldPanel the UK retail free-from market was about £355 million in 2014. More than half the population purchased free-from products. It is predicted that this will grow to £538 million by 2018. There is something of a revolution taking place.
Introduced on 1 April 2013, the Research and Development Expenditure Credit was designed to increase visibility and certainty of R&D tax relief and give large companies, and some SMEs, the option to take advantage of the RDEC instead of the current enhanced deduction (large company scheme) provisions.