BIA submission to the HMT consultation on a single R&D tax relief scheme

The BIA has responded to HM Treasury’s consultation on a single R&D tax relief scheme. In our submission, we highlighted that:

1. The UK has a truly world-leading life sciences industry that is growing in size and impact as a result of long-term support from successive governments, most crucially via the R&D tax relief scheme.
2. We welcome the intention to create a new simplified regime to ensure taxpayers’ money is spent as effectively as possible to support innovation and improve international competitiveness while reducing fraud and misuse of public funds.
3. This can be achieved if the following four requirements are met:
   • Provide an additional rate of credit for R&D-intensive SMEs
   • Exclude soft innovation
   • Include sub-contract R&D as eligible expenditure
   • Support specialist R&D service providers

We also set out our proposals for the structure of a merged scheme.

This submission follows on from the BIA’s previous submission to the Finance Bill Sub-Committee of the House of Lords, as part of its inquiry into the Draft Finance Bill 2022-2023, and complements the BIA’s submission to HM Treasury for the Spring Budget 2023.