Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will take steps to reduce the (a) time taken and (b) administrative burden for small- and medium-sized businesses to make research and development tax credit claims.

At Spring Budget 2023 the Government announced a new permanent rate of relief for the most R&D intensive loss-making small and medium sized enterprises (SMEs). The Government also announced at Autumn Statement 2023 the merging of the current SME and RDEC (Research and Development Expenditure Credit) tax relief schemes from April 2024, simplifying the system and providing greater support for UK companies to drive innovation. Changes were also made reducing the intensity threshold in the R&D intensives scheme from April 2024, allowing around 5,000 extra SMEs to qualify for an enhanced rate of relief.

From 8^th August 2023 it became mandatory to provide detailed information upfront before submitting an R&D claim, supporting claimants in getting their tax right and reducing the need for HMRC to ask for further information to check claims.

HMRC also continues to promote the Advanced Assurance scheme to eligible SMEs (eligibility includes companies with a turnover of below £2 million and less than 50 employees) applying for R&D tax relief for the first time, to give certainty and assure compliance with the R&D tax regime.