Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential benefits of relating research and development tax credits to research and development employment rather than research and development activity.

The Research and Development (R&D) tax reliefs take account of companies’ expenditure on R&D employees. For staff working directly on an R&D project, companies can claim relief for salary costs, Class 1 National Insurance contributions, and pension fund contributions.

However, other costs are also important and support relief, for example materials used in the R&D. From April 2023, data and cloud computing will be included as new qualifying costs within the R&D reliefs.