What does the autumn statement mean for tax relief?

A merged R&D scheme coming in April 2024

Has the Autumn Statement created simplification and greater support or complication and confusion within a short period of time?

Merging the R&D schemes creates a significant tax simplification, including an aligned set of qualifying rules and a more visible above the line credit, which we see as a positive for claimants.

And as of April 2024 the rate at which loss-making companies are taxed within the merged scheme will be reduced from 25% to 19%. This means that businesses will be able to retain more of the tax benefit

However, the reduction in the R&D intensity threshold (for R&D intensive companies) after April 2024, could open the doors to more fraudulent activity. We could see companies changing their accounting policies to meet this 30% threshold, to benefit from a higher rate of relief. With the focus over the last 12 months having been on reducing fraud and risk, we can’t help but think that the reduction of the threshold moves the problem from tax to accounts, rather than addressing the core issue.

The changes also mean that we will be operating under multiple iterations of one tax relief, with a general election on the horizon and a new budget coming before the impact even hits.

Even for qualified advisors and tax specialists this is a confusing time to navigate the relief, especially in the short-to-medium term. So for the average business owner who is already juggling today’s climate with the running of their business, it’s making the process of claiming even more complex.

As we wait for more specific information and further clarity, we would advisor future and current claimants to speak to their advisors and make sure they are forward planning before April 2024. 

The most generous capital allowances scheme in the world?

Continuity and confidence for those who are planning to invest

We more than welcome the full expensing regime having been made permanent. The super deduction played a huge role in incentivising businesses to invest during times of economic uncertainty

The businesses we work with have been calling for some form of continuity and comfort when it comes to investing and maximising capital allowances. We’re looking forward to helping them to strategically plan for their long term future with this extra level of security.

With interest rates going down, planning applications being fast-tracked and the full expensing regime being here to stay, the Autumn Statement definitely bring opportunities for UK investment. No more so than for those businesses operating in the housing, infrastructure and construction sectors.