Select committee: Finance Bill Sub-Committee
Conclusion 16
3rd Report - Research and development tax relief and expenditure credit
Published 31 Jan 2023
Paragraph 91
Finance Bill Sub-Committee Draft Finance Bill 2022-23 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
Draft guidance has been published and this is welcome. However, while we commend HMRC for a consulting on the draft guidance, we note that since the consultation period continues until the end of February, it will be March at the very earliest before a final version can become available. This would only be shortly before the new rules take effect from 1 April. In the meantime there remains an element of uncertainty—indeed the draft guidance specifically states that no action should be taken based on it. It is not clear to us why it has taken HMRC five months from the publication of the draft Finance Bill in July 2022 to draft and publish less than 10 pages of guidance.
From: Finance Bill Sub-Committee, 3rd Report - Research and development tax relief and expenditure credit, paragraph 91, 31 January 2023
Government response
The government responded to the whole report on 13 April 2023 (deadline 31 March 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government thanks the Committee and "notes its conclusions and recommendations", accepting some recommendations in full, some partially, and not accepting others.
- It does not accept the recommendation to drop the six-month claim notification requirement, saying it responds to "high levels of error and fraud" and limits "bulk claims for multiple earlier years".
- It does not accept the recommendation that relief payments carry a warning about later recovery, saying existing guidance gives "sufficient warning" and a new customer contact point would add resource and IT costs.
- On overseas expenditure, it partially accepts the call for transitional relief. The restriction now starts on 1 April 2024, with narrow exemptions, and it does not think further exemptions are necessary.
- On a merged R&D scheme, the Government is "currently considering the responses and no decision has been made", and intends "to keep open the option" of a merged scheme from April 2024.