Tax Issues in Research & Development

The research and development training course will cover:

• Principles of Research and Development relief – what qualifies for relief – looking beyond the R&D pharmaceutical industry.
• The Small Company Regime
  • Which companies qualify under the Small Company R&D Regime
  • The Choice between CT deductions and research & development tax credits.
• The Large Company Regime
  • The impact of the increases in R&D tax credits on the regime.
• Claiming for sub-contracted work
  • Parameters and limitations.
• The new territorial limitations
  • How these will work
  • What R&D industry outside the UK can still be claimed?
• Advance reporting requirements and digital reporting.
  • The new regime started on 1st April 2023.
• Structuring an R&D Report
  • How to make the report credible and accurate.
• Common errors.
  • HMRC (HM Revenue and Customs) has given guidance on common errors and R&D tax relief claims.
  • We review the actions to avoid.
• Agent’s responsibilities when signing CT600.
  • Often the agent responsible for preparing the CT600 may not have been involved in the original R&D report.
  • We look at the level of responsibilities of all parties.
• Lessons from tax cases on R&D.
  • HMRC has recently successfully challenged several R&D claims in the courts. We look at the lessons from the cases in research and development that HMRC has won and also where they have lost.
• 2024 changes
  • Finance Act 2023 will implement a significant amount of changes to the R&D Regime.
  • 2024 will see more changes such as further restrictions on R&D claims and potentially the merger of the SME (Small and medium-sized enterprises) and RDEC (Research and Development Expenditure Credit) Regimes.

The trainer is a Director of a consultancy company specialising in taxation, share scheme advice, reward and lecturing. He has developed a specialised share scheme service for small companies and advises FTSE companies on communication. The lecturing covers most aspects of Direct Taxation but his particular interests include employment taxation and transfer pricing, which poses unusual conceptual challenges.

Previous to this he worked for Henderson for nearly 9 years, leading the Share Schemes team for part of this time.

The trainer took the level 7 CIPD Masters qualification whilst at Henderson. Before Henderson, he was with Australia Mutual Provident (AMP) and helped set up one of the first Share Incentive Plans (SIP) for large companies in 2001. It was so unusual at the time that the Revenue phoned the trainer up to find out how they could encourage more large companies to adopt SIP.

The trainer started his career in taxation and for the following 16 years worked in three of the “Big Four” accountancy firms. He ended up as a Senior Manager with Deloitte & Touche, having worked on issues such as profit-related pay, share schemes, expatriate tax, tax investigations, reward management, US taxation, transfer pricing and corporate tax.

Away from work, the trainer likes cricket, history, skiing, tennis and gardening. He gives lectures on history which helps keep his presentation skills fresh.

This research and development training course takes a practical look at Research and Development Claims, taking into account the developments over the last 12 months including FA2023 and HMRC’s enforcement action.

Unlike other research and development courses, this one also looks at the case law research and development allowances in the courts and how this will affect future R&D claims.

The research and development course will be of interest to anyone who either advises on R&D expenditure claims or is required to review them as part of the process of filing a CT600. This would include auditors, tax advisors and in-house staff by R&D tax consultants.

April 2023 saw the most radical changes to research and development tax relief since the inception of the R&D Expenditure Credit.

The trend for increasing R&D tax deductions for small companies was dramatically reversed. In response to increased concerns about fraudulent claims, the compliance regime has been tightened with new disclosure requirements and responsibilities.

Recent arrests for allegedly fraudulent R&D claims have also highlighted the role that agents have in complying not only with tax legislation but also with the code of conduct of their professional regulatory body.

Tax reliefs for R&D still remain an attractive incentive to carry out R&D in the UK. One, however, needs to recognise the changing rules on R&D and also the further changes that are due to take place in 2024.