Clause 52 - Tax relief for expenditure on research and development
Finance Bill
5:30 pm
Mr Howard Flight (Arundel and South Downs, Conservative)
I think that everyone, particularly large companies, is pleased with the inclusion of the clause in the Bill and with the fact that a volume-based scheme is being introduced for large companies. However, the difference between the schemes for SMEs and large companies will lead to difficulties when small companies grow into large companies and vice versa. We believe in principle that there should be some integration between the two and our amendments to schedule 12 address that in part.
The complexity of the legislation and the continuing difficulty in determining whether expenditure falls within the definition of research and development will make it difficult for companies to decide in advance whether proposed expenditure will qualify for the new relief, and we have tabled amendments to schedule 12 to sharpen the definition. Those points of principle underlie the amendments that have been tabled to schedule 12.