Research and Development Tax Relief to be explored by the Lords Finance Bill Sub-Committee
Friday 14 October 2022
The House of Lords Finance Bill Sub-Committee today invites contributions to its inquiry on the draft Finance Bill 2022-23.
The sub-committee will focus on the reforms to the Research and Development (R&D) Tax Relief in the draft Bill.
This inquiry seeks written answers to these questions:
- Have the changes to the definition of R&D gone far enough in modernising R&D relief, and if not, what more needs to be included?
- How effective will the changes be in countering error and fraud resulting from spurious R&D claims and is there more that can be done, or different approaches that could be adopted?
- How successful is the refocusing of the relief in encouraging activity in the UK without adverse consequences?
- How aware are smaller businesses of R&D relief? Is there more that HMRC could be doing in practice to help smaller businesses access relief to which they are entitled?
- How helpful is HMRC and BEIS guidance in interpreting and applying the R&D relief rules?
- What view do you take of the requirement to give advance notification of R&D claims? What effect would you expect it to have on genuine and spurious R&D claims respectively?
- What is your experience of HMRC’s approach to dealing with claims to R&D relief which it suspects to be invalid, either through misunderstanding of the rules, or fraud?
- Are there lessons the UK could learn from the tax systems of other countries about how to encourage R&D
- How successful are the changes in R&D relief likely to be in encouraging innovation and development?
The sub-committee invites companies which claim R&D relief, their advisers, business and trade/sectoral organisations, and other interested parties to submit written evidence to this inquiry.
The sub-committee is particularly interested in the experiences of SMEs in claiming relief and how they expect the changes set out in the draft legislation to affect them.
Lord Leigh of Hurley, Chair of the Finance Bill Sub-Committee, said:
“These measures will affect companies that carry out research and development and claim Research and Development (R&D) Tax Relief. It will change the types of activity that will qualify for tax relief and the way in which businesses can claim relief. It is important that the Government gets these changes right.
“To inform our work we want to hear from as broad a range of people and organisations as possible. If you have a view on any aspect of these proposals, please let us know what you think.”
The deadline for the submission of written evidence is 2 November 2022.
Click here for more information on the inquiry, and details on how to submit evidence.