"Research and development tax credit statistics released today by HMRC show a significant reduction in the number of claims, down 26%, with a disproportionate 31% drop in claims from SMEs. Despite this, the overall value of support claimed by businesses has fallen by only 2% - the first decline since the COVID period. Today's data highlights the real impact of recent R&D tax relief reforms, with total claims now"
"While SMEs face increased friction with the recent reforms, larger businesses have benefitted from higher rates of return and have taken an increased share of the relief (47%) - although the number of RDEC claims has also dropped, albeit by a much smaller amount. The increased RDEC rate makes large, more risky projects more viable and gives greater planning certainty."
HMRC statistics show a 26% fall in R&D tax relief claims overall and a 31% fall in SME claims. The total value of support claimed fell by only 2%, the first decline since the COVID period, and total claims are at their lowest since 2015-16. First-time SME claims fell 45%, attributed to reduced relief rates and increased administrative effort acting as a de facto de minimis. Larger businesses increased their share of relief to 47% and benefited from a higher RDEC rate that supports larger, riskier projects. SMEs now face a more complex, time-consuming claims process that may reduce R&D investment or shift funding sources.
Read at London Business News | Londonlovesbusiness.com
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