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Exempt Start-Up Businesses from the SME R&D Tax Credit Payment PAYE Restriction

Written by Jon Cooper


Research and Development (R&D) Tax Credits are a tax incentive designed to encourage UK companies to invest in innovation. For every £100,000 spent on R&D, there is a potential Tax Credit payment of £33,350. However, from the 1st April 2020, it is proposed that the amount of payable R&D tax credit will be restricted to three times the company’s total PAYE and NICs liability.

At a time when Britain looks to lead the world in technological innovation, for many start-up businesses, the SME R&D Tax Credit payment provides a vital source of cashflow. This proposed change from the 2018 Budget would bring unintended consequences for start-ups and small companies. Those who are carrying out genuine R&D but not able to afford to take on permanent staff would lose their entitlement.

What We Are Doing To Challenge This

We at Cooper Faure believe that start-ups at the heart of innovation should not be penalised for being unable to afford to employ permanent staff, and we are campaigning against this change. Given the government’s desire to be a UK world leader in enterprise and innovation, this measure is counter-intuitive to that goal.

To make your voice heard, please sign our Parliamentary Petition here

If you have ever wondered whether there is an element of your business activity that would qualify for R&D tax relief, please contact us a tax@cooperfaure.co.uk arrange an initial consultation with one of our team of specialists.

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