Kate Gott Corporate Tax Director

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Kate Gott

Corporate Tax Director

Kate joined Wilson Wright in 2016, having predominantly worked within the UK’s top 10 accounting firms over the previous decade.

She is a chartered tax adviser specialising in advising businesses and their owners. She works for a wide range of clients, including companies, LLPs and partnerships.

Her areas of expertise include research and development tax credit work, both international and domestic tax efficient structuring, transfer pricing, and due diligence. Kate also has significant experience of working with private equity structures and professional service firms.

She works closely with her clients to ensure they keep up to date with their tax compliance obligations and are aware of tax planning opportunities and changes to the tax legislation that may affect them.

31 Jan 2023

The Autumn Statement 2022 announced serious changes to the UK Research & Development tax relief regime. The proposed changes will apply to expenditure incurred on or after 1 April 2023.

Whilst the Government’s intention is to rebalance the relief available under both the RDEC and SME regime, this will have a significant impact on those companies who qualify for relief.

Whilst it is good news for those companies claiming under the RDEC regime, it is not such good news for those companies claiming under the SME regime. The new rates applicable to the regimes are as follows:

• RDEC–20% (currently 13%)
• SME additional deduction–86% (currently 130%)
• SME tax credit–10% (currently 14.5%)

For a loss-making SME, this reduces the value of the benefit from 33.3% to 18.6%.

The Government has also announced that it intends to consult on the design of a new single scheme and will work with companies and specialist advisers to understand whether further support is needed for research intensive SMEs.

Further changes under the regime will also be implemented. These changes will be introduced for accounting periods starting on or after 1 April 2023 and were summarised in our last Newswire Article, a copy of this article can be found here.

Draft guidance (subject to a consultation) has been published by HMRC on how the reforms will work in practice, a copy of this draft guidance can be found here.

This guidance includes additional information regarding these changes, including details on the number of projects a company will need to describe within its claim submission.

Wilson Wright plans to respond to this consultation, and we welcome any comments you would like us to consider.

Another change that is worth reiterating is that companies will be required to inform HMRC in advance if they intend to make a claim. This notification will need to be made within six months of the end of the accounting period to which it relates by making an online ‘claim notification’. There will however, be an exception to this requirement where companies have claimed in any of the three preceding accounting periods. We are currently waiting on secondary legislation which will detail the information to be included in this notification.

We expect the announcement of the rate changes to significantly impact future cashflows for businesses already claiming R&D tax relief under the SME regime.

If you have concerns or would like to discuss the impact this may have on your business, please do contact our experts. In addition, please do contact us if you would like to input and provide comments to the consultation.