On 6 March 2024, the Chancellor of the Exchequer, Jeremy Hunt, presented his Spring Budget 2024 to the House of Commons. Compared with the Autumn Statement 2023, there was little in the way of substance regarding innovation incentives, R&D tax relief, or grant funding. Ayming’s response follows specific points raised in the Chancellor’s speech and the accompanying policy paper.
HMRC expert advisory panel for R&D reliefs.
The government announced it would establish an expert advisory panel to support the administration of the R&D tax reliefs. Details of this announcement remain light, and we welcome further clarification on the panel.
Ayming has long supported HMRC and its administration of the R&D reliefs, and an expert advisory panel would help bring sector expertise to the table. The industry, however, needs to understand the scope and remit of this advisory panel and its constituent members. It will also need HMRC to ensure the panel is collaborative.
Ayming believes the advisory panel should bring together experts from across the UK industry, R&D tax specialists, and accountancy firms to ensure future changes incentivise as broad a pool of UK businesses to innovate as possible.
The government’s use of the term “cutting-edge R&D” will require clarification. Current legislation is deliberately broad and encourages innovation across the spectrum. Further focus on cutting-edge R&D may shift the goalposts for existing claimants and discourage businesses from investing in innovation – contrary to the spirit and policy objective of the legislation.
Consultation to raise standards in the tax advice market
As part of the Budget 2024 speech, The Chancellor announced the government’s intention to raise standards in the tax advice market through a strengthened regulatory framework.
Ayming is happy to contribute to this consultation, which addresses HMRC’s concerns about fraudulent and erroneous R&D tax relief claims. The lack of regulation in the tax advice market has caused problems, and Ayming supports the government’s efforts to strengthen the regulatory framework.
We will publish our complete consultation response in due course.
Efficiency in the Public Sector
The government aims to tackle tax non-compliance through investment in HMRC to improve HMRC’s capacity to collect tax debts. The Chancellor forecasts this will raise over £4.5 billion in tax revenue by 2028-29.
Ayming welcomes this decision and the positive impact we expect it to have on efficiency and capacity at HMRC, which has been an issue for some time.
This investment should see a downturn in cases such as one of Ayming’s clients receiving a 50-question query on a relatively small tax relief claim. Ayming is pleased that HMRC is getting the investment it requires and hopes that HMRC can allocate future resources commensurately with the claim.
If you have questions or comments on the Spring Budget 2024, either a query about the specificities or worries that it will affect your existing claim, please get in touch, and we will be happy to discuss in more detail.
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