Research and Development Tax Credit

Treasury written question – answered on 24th June 2019.

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Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme

To ask the Chancellor of the Exchequer, what steps his Department is taking to support SMEs affected by the cap on the R&D tax credit scheme.

Photo of Jesse Norman Jesse Norman Financial Secretary to the Treasury and Paymaster General

Research and Development (R&D) tax reliefs, including the small or medium-sized enterprise (SME) scheme, support businesses to invest and are a core part of the government’s support for innovation.

Budget 2018 announced a cap on the payable tax credit element of the SME tax relief scheme of three times the company’s total PAYE and NICs liability for that year, to help prevent identified fraud and abuse of the scheme. The Government consulted on how the cap would be applied to minimise any impact on genuine businesses between 28 March and 24 May, and the responses to that consultation are presently under consideration.

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