Research and Development Tax Credit

Treasury written question – answered on 1st November 2018.

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Photo of Chi Onwurah Chi Onwurah Shadow Minister (Department for Business, Energy and Industrial Strategy) (Industrial Strategy)

To ask the Chancellor of the Exchequer, with reference to the Budget 2018, if he will publish the PAYE restrictions that will be placed on R&D tax allowances for small and medium businesses.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

As announced at Budget 2018, Finance Bill 2019-20 will introduce a limit on the amount of payable tax credit that can be claimed by a company under the R&D SME tax relief. The limit will be set at three times the company’s total PAYE and National Insurance contribution (NICs) payment for the period. The change will have effect for accounting periods beginning on or after 1 April 2020. Any loss that a company cannot surrender for a payable credit can be carried forward and used against future profits. The government will also consult on how the cap will be applied, to minimise any impact on genuine UK businesses.

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