R&D – Seismic change is on the way

The R&D tax relief landscape is undergoing seismic change as a result of the Government’s ongoing attempts to tackle fraud and abuse in the sector.  This started with the changes to the rates effective from 1 April 2023, continued with the introduction of the mandatory Additional Information Form (AIF) from 8 August 2023, and will continue into 2024 with perhaps the biggest change since the inception of the relief in the early 2000s.

R&D – Seismic change is on the way

There are two key elements to be aware of:


For accounting periods beginning on or after 1 April 2023, companies must advance notify HMRC of their intention to make an R&D claim within 6 months of the year-end. Broadly the requirement is restricted to those companies who have not made a R&D claim before or where this is the first claim in 3 years. Failure to notify removes the right to claim for that accounting period and there is no right of appeal.

The new requirement means that companies should continually monitor their R&D activities from now on in order to protect their right to claim in the future.


A single, merged scheme for R&D relief will replace the SME and RDEC schemes from 1 April 2024.  The aim is to simplify the relief by moving to a single rate (20%) and set of qualifying rules.

It is key to remember that the definition of R&D for tax purposes remains unchanged.

In reality however there will be two schemes that will run in parallel as the enhanced rate for R&D intensive SMEs (introduced from 1 April 2023) will continue to be available under the current SME model. The threshold for R&D intensity has been lowered from 40% to 30%, making more businesses eligible for the enhanced rate.

If you would like to find out if your business may qualify as a R&D intensive company or have any other queries regarding the changes, please get in touch.

If you have any queries on R&D or would like assistance please contact Lucy Lloyd on 01633 653177 or Lucy.Lloyd@kilsbywilliams.com.

Alternatively, please contact your usual advisor on 01633 810081 or email info@kilsbywiliams.com.