Hands holding blocks with R&D and related images on them

Rushing ahead with R&D changes risks meltdown, ATT warns

22 November, 2023

The introduction of a new R&D tax relief regime from next April will be “near to impossible” for businesses, agents and HMRC to adjust to, the Association of Taxation Technicians (ATT) has warned.

In today’s Autumn Statement,1 the Chancellor confirmed that proposals to merge the two current research and development (R&D) tax relief schemes, one for small and medium sized entities (SME) and a separate R&D Expenditure Credit (RDEC) scheme used mainly by larger companies, will go ahead from April 2024. 

This leaves less than five months for legislation to be passed, systems put in place and taxpayers and HMRC to get up to speed, a timetable the ATT says is unrealistic.

Senga Prior, Chair of the ATT Technical Steering Group, said:

“Successfully delivering a new scheme by April 2024 will be near to impossible.

“Businesses, agents, software providers and HMRC all need time to put the required systems and processes in place. The current timetable risks stretching HMRC services still further at a time when they’re already struggling to cope.

“Introducing the new combined scheme from April 2024 will also mean we do not have sufficient time to assess whether recent changes have actually had any impact on fraud and abuse.”

The ATT previously raised concerns in September2 that the commencement date of April 2024 was too soon and said that more time should be taken to consult and ensure the scheme can be delivered successfully.

Senga Prior added:

“Tax reliefs can only incentivise R&D if they are clear, and businesses have certainty as to how they will operate. The recent pace of change means that certainty to date has been limited or non-existent.

“Given the fundamental nature of the changes proposed, and the impact they may have on R&D activity in the UK, the process should not be rushed, but instead the appropriate time taken to ensure that any new scheme is well designed and operates effectively for all sizes of business.

“Given the scale of the issue, a prudent and considered approach would be more appropriate”.

Notes for editors

  1. Autumn Statement 2023: Research and Development Tax Reliefs Reform.

  2. ATT press release: R&D changes go against simplification remit.