The government has suggested merging the two research and development (R&D) tax relief schemes to reduce complexity and mitigate fraud, while seeking to improve efficiencies in generating investment.

Is the government’s bold vision for a UK Silicon Valley at odds with how start-ups and scale-ups are being managed at policy level?

In its response to HMRC’s draft R&D guidance, ICAEW’s Tax Faculty identifies a number of aspects and scenarios where considerable uncertainty remains.

There are currently two R&D tax relief schemes available to businesses. Changes to these will come into force from April 2023, and there are proposals to redesign and overhaul these in the longer term.

An eight-week consultation has been launched following the Autumn Statement announcement of a simplified, single RDEC-like scheme.

The annual release of tax relief statistics, published on 12 January 2023, shows a significant rise in the cost of some reliefs. However, overall, the percentage increase in cost between 2020/21 and 2021/22 was less than the increase in tax receipts over the same period.

The Chancellor has confirmed that headline rates of income tax and capital gains tax (CGT) will remain at their current levels. However, there were various reductions in key thresholds and allowances, and several others were frozen for longer than previously announced.

A representation dated 3 March 2023 to a consultation published by the government in January 2023.

A comment dated 6 February 2023 to guidance published by HMRC on 20 December 2022.

A representation dated 31 January 2023 to HM Treasury ahead of the Spring Budget taking place on 15 March 2023.

ICAEW’s Tax Faculty provided both oral and written evidence to the House of Lords Economic Affairs Committee Finance Bill Subcommittee on proposed changes to the R&D tax relief regime.

HMRC internal manual providing R&D rate tables, guidance and information on the treatment of R&D expenditure under SSAP 13, FRS 102, IAS 38 and FRS 105.

HMRC guidance on the different types of Corporation Tax relief available for companies that work on R&D, including specific guidance for small or medium-sized enterprises and information on claiming Research and Development Expenditure Credit .

Guide to R&D tax credits and incentives by country, including a comparison of patent box regimes across fifteen countries and general R&D incentives across 36 countries.

Research report produced by HMRC examining the take-up and use of Research and Development tax credits, and assessing their impact on R&D investment in the UK.