The Government have extended their consultation into the prevention of abuse of R&D tax relief for SMEs, due to the impact of coronavirus on industry. The new closing date is 28 August 2020.
Research and Development (R&D) tax reliefs are designed to support businesses to invest and are an integral part of the Government’s support for innovation.
To prevent abuse of the SME scheme, the 2018 budget announced that the amount of payable tax credit a qualifying loss-making business can receive would be capped at three times the company’s total PAYE and NICs liability for that year.
The government consulted on the application of the cap between 28 March and 24 May 2019, to ensure eligible businesses are able to access the relief. The government published their response to this 2019 consultation here.
The Budget in March 2020 announced the introduction of the cap would be delayed until 1 April 2021, in order to consult on changes to the design of the measure. This consultation was published on 19 March 2020 and was due to close on 28 May 2020.
The government recognises that many sectors and businesses have been affected by COVID-19. The Government wants to give all stakeholders time to submit their views so they have extended the consultation. The closing date is now 28 August 2020.
The consultation document can be found here.
More information can be found here.