Overseas research and development

20 May 2024 / Katy Long

Issue: 4937 / Categories: Comment & Analysis , R&D , SMEs , tax reliefs , Admin

Navigating overseas R&D relief changes

The introduction of a merged scheme for research and development (R&D) tax relief for accounting periods beginning on or after 1 April 2024 provided the government with the opportunity to include long-mooted restrictions on overseas activities.

The government signposted its intention to refocus R&D tax relief towards rewarding and encouraging more innovation within the UK as far back as the Autumn Budget in 2021 when restrictions on overseas R&D were first announced. Implementation was subsequently delayed enabling consideration of the interaction of these measures with the design of a merged scheme.

As Jenny Tragner highlighted in her article ‘Good guidance – as far as it goes: Part 1’ (Taxation 28 February 2024) initial guidance on overseas restrictions published in December 2022 was not hugely helpful running to just three pages. Jenny was more complimentary about HMRC’s updated guidance while at the same...

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