R&D tax relief is changing

By Dominic Ball, Pierce

31 Oct 2022

Since its inception, the UK’s R&D tax credit scheme has offered a valuable incentive for businesses carrying out innovative work, creating, or improving new products and processes.

Companies that qualify can deduct an extra 130 per cent of costs from their taxable profit - those that are loss-making could receive a tax credit of 33p for every £1 incurred.

On July 20, draft legislation was released heralding major changes for the R&D tax credit regime.

Here’s what you need know:

New eligible expenditure

Qualifying costs were previously limited to staff, sub-contractor, software and consumable costs.

HMRC has now included additional categories including data, cloud and pure mathematics costs.

This is good news for those engaged in the latest technology advances, particularly in AI, robotics and machine learning.

Refocusing on UK innovation Relief for subcontracted work will now be limited to UK activity.

Expenditure must be either ‘UK expenditure’ or ‘qualifying overseas expenditure’ (in that there’s a justifiable reason for undertaking R&D outside the UK such as legal or geographical restrictions).

R&D claim procedure

Finally, several measures have been introduced to tackle abusive claims including specifying the format of claims.

An important new condition is that companies intending to make their first claim must notify HMRC within six months of the end of their accounting period – meaning companies may miss out if they are not prepared.

The latest changes will take effect from April 2023 - companies intending to make a claim should seek early advice on the potential impact these rules may have.

Enjoyed this? Read more from Dominic Ball, Pierce

Latest news

1

Fuuse raises further £6m as it heads to profitability COO Nik Southworth, CEO Michael Gibson, CFO Sonia Davies.

Fuuse raises further £6m as it heads to profitability

13 Oct 2025

2

Preferred developer named for strategic site Barnfield named as preferred developer for site

Preferred developer named for strategic site

13 Oct 2025

3

Warden completes hospital improvement work Warden Hospital

Warden completes hospital improvement work

13 Oct 2025

4

New planning rules for HMOs Chorley town hall

New planning rules for HMOs

13 Oct 2025

5

New India branch campus on the horizon for Lancaster University Keir Starmer meets Indian PM and included Prof Simon Guy Lancaster University. Pic Simon Dawson

New India branch campus on the horizon for Lancaster University

09 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

The New Employee Rights Landscape: Day One Compliance Essentials
EventBrite NORi - 15th Oct 2025 Webinar.png.png
LBV Hub Webinar
15 Oct 2025 - 15 Oct 2025

The New Employee Rights Landscape: Day One Compliance Essentials

Microsoft Teams, Microsoft Teams, PR253XH

13:30 - 15:00

Unlocking major project opportunities in the North West
Lancs-cham-logo.jpg.jpg
LBV Hub Seminars
15 Oct 2025 - 15 Oct 2025

Unlocking major project opportunities in the North West

Strathmore Hotel, Morecambe, LA4 5AP

08:00 - 10:00

The Business Network Central & East Lancashire
LBV Header (26).png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

October Freelancer Meet-Up
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

October Freelancer Meet-Up

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

The Autumn Re set - pour me a wine
LBV Advert_Autumn Reset 1200 x 630px.png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Autumn Re set - pour me a wine

The Artistry House , Preston , PR1 3JJ

17:30 - 19:30

HR Essentials for pubs, bars and licensed venues
EventBrite NORi - 22nd Oct Webinar.png.png
LBV Hub Webinar
22 Oct 2025 - 22 Oct 2025

HR Essentials for pubs, bars and licensed venues

Online - Teams, Leyland, PR253XH

13:30 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin