A graphic of Chancellor of the Exchequer Rishi Sunak as he covers the Spring Statement 2022

R&D tax relief highlights from the Spring Statement 2022

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In today’s Spring Statement, the Chancellor announced a focus on ‘Capital, People and Ideas’ in order to increase productivity in the private sector. Hidden within this were some small changes to the R&D tax relief scheme, and promise of further reform and changes in the Autumn.

Summary of the changes:

Cloud computing costs
The government confirmed that these costs will be allowable for R&D tax relief from 2023.

Overseas R&D
The government announced some exemptions to the upcoming rules that would prevent overseas subcontractor costs being included in an R&D claim. These allow costs to be included where there are:

  • material factors such as geography, environment, population, or other conditions that are not present in the UK and are required for the research – for example, deep ocean research 
  • regulatory or other legal requirements that activities must take place outside of the UK – for example, clinical trials

Pure mathematics
The government announced that, from April 2023, research done in the area of pure mathematics will now qualify for R&D tax relief.

Additional compliance resource
HMRC will be given £161 million over the next five years to increase compliance capacity. While not directly targeted at R&D tax relief, this will undoubtedly increase the number of R&D tax inspectors. 

Additional announcements

Alongside these fairly minor changes came a commitment to further reform of the scheme, but no details were forthcoming about what this might mean. The government did announce that they are considering increasing the generosity of the RDEC scheme, but again no details are available.

Overall, here at WhisperClaims we welcome the expansion of the scheme to include new areas of science and cost categories and are especially pleased that the government is committing to increasing compliance across all areas of tax. We welcome the slight softening of the rules around overseas contractors and await with bated breath the Autumn budget and what that may bring for R&D tax relief!

How to write an R&D tax relief technical narrative

With HMRC’s new mandatory requirement for project descriptions on all submissions, we wanted to share our experiences to help others to write their best possible technical narratives.

Available to download here.

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