The implications for UK R&D in the Chancellor's Autumn Statement

December 03, 2014

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By Rachel Moore, innovation incentives specialist

We welcome changes to increase the R&D incentives for both large companies and SMEs with the R&D Expenditure Credit (RDEC) increasing from 10% to 11% and SME relief increasing from 225% to 230% from 1 April 2015.  There are also helpful changes for smaller claimants to provide advance assurance for first time claimants as well as a consultation on the issues faced by smaller businesses.

However, not all claimants will be winners as a result of the changes. HMRC have restricted the costs that can be claimed on consumables which has long been an uncertain area for claimants.  From 1 April 2015, companies will no longer be able to claim the cost of materials incorporated into the products that are sold to customers.  While this should provide some certainty for claimants there are likely to be some significant losers, particularly in engineering, manufacturing and aerospace sectors.