The changed landscape…
These changes are reflected across several key areas of the R&D tax scheme.
The following highlights where the most notable updates have occurred, and how they affect the preparation of claims in practice:
The merged scheme
The introduction of the merged RDEC scheme has brought together elements of the previous SME and RDEC regimes, changing how claims are calculated and presented. While this has simplified certain structural differences between schemes, it has also introduced new considerations around eligibility intensity and transitional claims, particularly for companies with accounting periods spanning the change.
Overseas restrictions
Under the merged scheme, restrictions on overseas expenditure now apply to subcontracted R&D and externally provided workers, with only limited exemptions. While the rules are clearly defined in legislation, applying them in practice often requires careful assessment of where activities are carried out, and how costs are structured and evidenced.
Subcontracting rules
Changes to subcontracting rules have shifted the focus toward understanding who initiated the R&D, and whether R&D was anticipated at the outset of a contract. This has introduced a more nuanced approach to determining which entity can claim, requiring clear documentation and consistent application across different client scenarios.
Reporting requirements
The introduction of the Additional Information Form (AIF) has increased the level of detail required when submitting R&D claims. Firms are now expected to provide more granular information on projects, costs and methodologies, reinforcing the need for structured information gathering and clear documentation throughout the claim preparation process.
Claim notification
Pre-notification requirements through the Claim Notification Form (CNF) have introduced an additional step in the claims process for certain companies. Missing a notification deadline can prevent a claim from being made, placing greater emphasis on identifying potential R&D activity early and maintaining appropriate internal processes.
Taken together, these changes increase the operational expectations placed on firms preparing claims.
