On 16 January 2015, the UK government launched a consultation on the research and development (R&D) tax credit for small and medium-sized enterprises. The consultation was promised in the 2014 Autumn Statement (see in particular paragraphs 1.144 and 2.97 to 2.99).
The consultation focuses on issues encountered by small businesses in claiming R&D credits. It seeks views on:
- How to increase awareness by small businesses, who to target and how to convey information.
- The design of the rules (in particular, whether the smallest businesses would benefit from the option of using accounting principles to identify R&D and whether the rules on qualifying costs could be simplified).
- Understanding of the rules, whether additional guidance would be helpful for particular types of businesses and the form that any additional guidance should take.
As previously announced, the consultation also proposes a free, optional, advance assurance process for small businesses that have not previously claimed R&D credits, that will provide a period of certainty once a claim has been made.
The consultation proposes that the assurance process will be available to companies meeting the EU definition of either a small or micro business as set out in Commission Recommendation 2003/361/EC. This defines a small business as an enterprise which employs fewer than 50 people and whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million
You can submit responses to the consultation questions in writing, by email or on-line.
The closing date for comments is 27 February 2015.