Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.


R&D Tax: Important Exemptions and Upcoming Changes for the IT & Software Industry

By Michael Eghan, IT Sector Lead, Ayming

Following the announcement in the Autumn Budget 2021, some changes were made to the R&D tax relief scheme, including those specific to the IT and software sector.

Historically, certain elements prevalent within the sector were not claimable, however it was announced that this will change under the updated scheme, with the following categories brought into scope and qualifying for R&D expenditure relief as of 1 April 2023:

  • Licence payments for datasets
  • Cloud computing costs that can be attributed to computation, data processing and software

The government invited these changes in the hope that the tax relief better incentives cutting-edge R&D activities which rely on vast amounts of data that are analysed and processed through cloud technology.

Sub-contracting and driving innovation towards the UK

Many IT & Software companies heavily rely on sub-contractors to conduct their research and development, namely due to the cost effectiveness it provides to UK businesses. The autumn budget 2021 proposed to limit tax relief for payments to subcontractors and activities that take place in the UK.

This new change by the government is intended to encourage UK companies to employ skilled staff and to conduct research and development activities within the UK, which will inevitably improve skills and benefit the UK from a tax perspective.

In contrast, where companies claim for expenditure on externally provided works (EPWs), these will in future be restricted to EPWs who are employed in the UK and contribute to PAYE/NIC.

Compliance and ethical R&D claims

Compliance and regulation have become a key focus for HMRC to protect the integrity of the R&D tax relief scheme. The autumn budget also proposed administrative changes that will ensure compliance of future claims, meaning companies will need to provide more information when processing claims. All claims will be digitally filed and the intention to claim must be notified by either the company or its appointed advisor.

Here are some more of the proposed changes:

As we are currently aware, the digital claim submissions will be put in place from April 2023, but it is currently unclear when the other compliance requirements will take effect.

This is a Sponsored Feature.

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!

By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts