Select committee: Finance Bill Sub-Committee
Conclusion 37
3rd Report - Research and development tax relief and expenditure credit
Published 31 Jan 2023
Paragraph 179
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)
We were concerned to learn that HMRC was perceived as adopting a confrontational approach to R&D claimants. We agree with our witnesses that a confrontational approach could lead to companies, particularly those smaller companies new to the relief, giving up on future claims. The Charter requirement that HMRC deal with taxpayers fairly should underpin its work in R&D relief cases as much as other areas of HMRC’s work.
From: Finance Bill Sub-Committee, 3rd Report - Research and development tax relief and expenditure credit, paragraph 179, 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.