Yesterday the Chancellor’s proposals to move toward a single RD incentive began their legislative process through parliament, consolidating the reforms begun by HM Treasury in November 2021. For innovative companies, the changes will be fairly marginal and interestingly there was no sign of the offshore subcontracting limitations appearing yet in legislative proposals (Good news in a global RD economy perhaps?). The move also readjusts the RD incentive back to where it began in 2002.
The practical application of the changes (see below) must be read against the declining corporate tax rate for SME companies, changes to dividend taxation for company owners and amendments to national insurance contributions and capital allowances incentives. A Budget intended as fiscally stimulating for growth, an ‘Autumn statement for growth’ has clear plans to reduce government debt with the UK being the third lowest of the G7 by 2028/9.
The full statement can be read here:
together with the proposed amendments to tax rates & allowances from 01 April 2024,
The Tax Insight team are available to talk through the new look incentives for your innovative company, and / or the personal tax adjustments for company directors