Changes to R&D tax credits in Autumn Statement 2022

Publication featured in: Accountancy Age, Tax Journal

While the separate Research & Development Expenditure Credit scheme has been made more generous, this will benefit larger businesses who already find it easier to access other forms of funding.

It is disappointing to see a 45% knee-jerk cut to the SME scheme funding for start-up and scaling tech businesses. Start-ups often rely on the R&D tax credit to fund their rapid growth. The 86% enhanced tax deduction is now the lowest it has ever been.”  

The reduction in the repayable SME credit rate to only 10% will also hit loss-making companies hard as they see a cut to their cash-back from the scheme – often a lifeline for early-stage start-ups.

The 50% plus increase in the RDEC rate will increase the corporation tax benefit for all the largest tech companies in the UK by a significant 4.5%. This will include those multinational companies making substantial UK trading profits that will already have numerous funding options.

Overall, these changes will have a major, negative impact on the UK’s most innovative start-ups, while providing a further saving & extra tax incentive to larger businesses.

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