Budget 2020 analysis: Research & Development
During his inaugural Budget speech, the new Chancellor announced a raft of investment in research and development projects across the country.
These announcements included minor amendments to the research and development tax reliefs.
SME Research & Development PAYE Cap
The government had previously announced that from April 2020 the amount of payable R&D tax credit that a qualifying loss-making company could receive in any tax year was being restricted to three times the company’s total PAYE and NICs liability for that year. However, following consultation this has been delayed by one year, and will now come into force from 1 April 2021.
Research and Development Expenditure Credit (RDEC)
The tax relief for large companies (and in some cases Small and Medium sized Enterprises) that carry out qualifying Research and Development and claim the Research and Development Expenditure Credit has increased from 12% to 13%.
For advice on Research and Development tax please contact a member of our tax team.