Research and Development Tax Relief to be explored by Lords Finance Bill Sub-Committee
In recent months, many advisers have commented on the acknowledgement by the Treasury that a serious problem exists within the R&D tax advisory sector. Whilst many reputable advisors in the market have been sounding the alarm for some time, HMRC and The Treasury have historically been reluctant to formally acknowledge the problem. However, this has now changed, with a number of new rules being introduced to combat fraud and abuse of the R&D tax system.
The House of Lords Finance Bill Sub-Committee has now launched an inquiry to examine the effectiveness of the proposed changes.
This inquiry seeks written answers to the questions at the link below:
Whilst many of the changes are largely supported by those who work in the advisory sector, the most controversial of the proposals is the requirement for certain companies to pre-notify HMRC in advance that they intend to make an R&D claim. They will need to do this using a digital service, within 6 months of the end of the period to which the claim relates.
Companies which have claimed the relief in any of the three preceding accounting periods will not need to pre-notify.
The sub-committee invites companies which claim R&D relief, their advisers, business and trade/sectoral organisations, and other interested parties to submit written evidence to this inquiry.
The deadline for the submission of written evidence is 2 November 2022. Whilst we still expect the forthcoming changes to be introduced next year, the decision by The House of Lords Finance Bill Sub-Committee to invite questions into the changes may hint at some reservations within government over certain aspects of the reform. Watch this space!
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