S everal key changes took effect from 1 April 2024, introduced with the government’s goals of tax simplification and reducing fraud. Tyler Hursey, Tax Adviser, shares what this means specifically for the construction sector, and the new opportunities and important considerations these changes offer when claiming R&D tax relief. R&D Tax Relief - Key 2024 Changes For accounting periods commencing on or after 1 April 2024, a new merged scheme now applies to all companies, other than those loss-making R&D intensive SME’s who will continue to use the existing SME scheme. Under this new merged scheme, companies claim relief by way of a taxable ‘above-the-line’ tax credit, equal to 20% of the qualifying expenditure based on the current RDEC Research & Development Expenditure Credit (RDEC) scheme. A notable change here though is that all companies are now able to claim R&D tax relief on work subcontracted out. However, large companies will no longer be able to claim the R&D tax relief if the work has been subcontracted to them, to align with the SME rules. Additionally, qualifying expenditure must generally be incurred within the UK, except where there are:
R&D in the Construction Sector How the April 2024 Changes Affect Tax Reliefs For many companies Research & Development (R&D) tax relief has long been a valuable incentive for those investing in innovation. Encouraging businesses to push boundaries, develop new technologies and enhance products or processes by offering significant tax savings.
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Material factors such as geography, environment,
population, or other conditions that are not present in the UK and are required for the research. Regulatory or other legal requirements that activities must take place outside of the UK.
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6 | SCRUTTON BLAND | P R O P E R T Y A N D CONSTRUCTION
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