Now that the UK has officially left the European Union, what, if any, changes will be made to UK R&D initiatives?
‘Will Brexit affect my R&D claim?’ is a question many business owners have been asking for the past year, and rightly so. Brexit is expected to have a huge impact on the economy, business, and finance, all of which play a role in R&D tax credits.
The UK government has not suggested R&D tax relief would be scrapped or reduced. Nor has it suggested any significant changes to how the scheme would function.
So, the short answer is no, leaving the EU will not have any major effect on R&D tax credit claims. However, there has been some speculation that the government would expand the R&D scheme after Brexit and this is why:
The UK is no longer bound by the EU’s rules on state aid
When the UK was a part of the EU the Government was restricted in how much cash it could give businesses through R&D tax credits by the EU’s State Aid rules. This meant that the European Commission could limit how much financial aid each country gives to domestic businesses. Now that the UK is no longer bound by this rule; the government could, if it chooses to, increase the amount of R&D tax relief businesses can receive.
UK R&D support is already far more generous than the EU’s and we expect it to stay unchanged.
In summary, leaving the EU does not have any major impact on R&D tax credits. If anything, it only allows the UK to have greater control over this crucial part of driving innovation and helping businesses to grow.
Aside from helping businesses, R&D is also important to the UK economy. Every £1 spent on public R&D delivers approximately £7 of net economic benefit to the UK and unlocks £1.40 of private R&D investment.
Please do not hesitate to get in touch with us if you have any questions about R&D tax credits. Our consultants are based all across the UK and are on hand to help. Alternatively, you can take our quick Pre-Consultation Questionnaire to find out if you could qualify.