Research and Development Tax Credits – Changes from April 2023

Research and Development Tax Credits - Changes from April 2023

Research and development tax credits relief will see changes in the way businesses apply for the relief, from April 2023. Additionally, the introduction of new qualifying measures will make the relief more accessible to a wider range of businesses.

Changes when submitting research and development tax credits claims

In order to tackle the abuse of reliefs, HMRC has confirmed that all future claims for R&D reliefs must be submitted digitally.

Digital claims will need to include a breakdown of costs, featuring qualifying categories. Companies will also need to include a brief description of the R&D. Furthermore, each claim will need signing off by a senior officer within the company.

Companies will need to let HMRC know in advance that they plan on making a claim unless they are new claimants or have not claimed in the previous three accounting periods

They will need to do so within six months of the end of the period the claim relates to, via the digital service.

Changes will affect companies claiming research and development expenditure credit and SME R&D tax relief. Companies that have made a Patent Box election may also be affected. 

research and development tax credits

Changes to qualifying for R&D relief

From next year, qualifying expenditure will include data licences and cloud computing. This will reflect developments in technology and the different ways in which companies are now undertaking R&D.
From April 2023, relief will focus on UK expenditure, with claims limited to UK-based activity, with a few exceptions. UK companies should in turn benefit from employee skills and industry knowledge that arise from R&D activity.

Business will also need to apply for all R&D reliefs online and pre-register for claims. These changes will apply to all businesses, regardless of size.

Time Limits

The time limit for making R&D claims will also change. Companies will be able to make a claim up to two years from the end of the accounting period that the claim relates to. This is an extension of the current 12 months from the statutory filing date.

The new rules will prevent companies from benefiting or having more time to make a claim if they fail to register or notify HMRC that they are dormant.

SMEs will also gain a level of protection from the new measures. HMRC has stated that companies growing/transitioning from the SME to the RDEC scheme will benefit from one-year protection. As a result, companies can keep their SME status if they exceed the size threshold for an SME.

Contact us

For more information on research and development tax credits changes, get in touch with us.

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This guide is an informative piece and does not constitute tax advice for individual matters.


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Emily Dodds

Emily Dodds

Marketing and Business Development Officer

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