Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Options for companies affected by the ban on R&D tax credits for overseas costs

23 November 2021 / Nigel Holmes
Issue: 4818 / Categories: Comment & Analysis
64635
Bringing R&D home

Research and development (R&D) tax relief is not usually centre stage when the chancellor delivers a Budget but Rishi Sunak took everyone by surprise last month. While he added to the country’s R&D spending commitments he pulled the rug out from underneath businesses when it came to overseas costs qualifying for tax credits. They will no longer be eligible from April 2023.

On the face of it this change is well-meaning. It will encourage businesses to perform their R&D in the UK and not overseas creating a virtuous circle of increased spending investment and job creation. However this will heavily affect thousands of businesses that perform R&D overseas including plenty of small and medium sized enterprises.

This is also a fundamental shift because companies subject to corporation tax have been able to claim on overseas expenditure ever since the scheme was created in 2000....

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon