Select committee: Finance Bill Sub-Committee
Recommendation 32
3rd Report - Research and development tax relief and expenditure credit
Published 31 Jan 2023
Paragraph 156
Finance Bill Sub-Committee Draft Finance Bill 2022-23 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
We agree with our witnesses that HMRC’s CIRD Manual is not an ideal resource for SMEs considering whether to claim R&D relief. We recommend that HMRC, as a minimum, updates its 2016 guide for SMEs to provide SMEs with helpful information about how the relief works.
From: Finance Bill Sub-Committee, 3rd Report - Research and development tax relief and expenditure credit, paragraph 156, 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.