CHANGES TO R&D TAX RELIEF, CULTURAL TAX RELIEFS DOUBLED & GROUP RELIEF FOR EUROPEAN COMPANY LOSSES TO END

As announced in the Budget R&D, tax relief will be reformed from April 2023 to support modern research methods by expanding qualifying expenditure to include data and cloud costs, and to focus tax relief on innovation carried out in the UK. HMRC will continue to target abuse of this generous tax relief and improve compliance.

With effect from 27th October 2021, group relief for losses of 75% subsidiary companies’ resident in the European Economic Area and companies trading in the UK through permanent establishments will end.

Eligible companies engaged in the production of qualifying theatrical productions, orchestral concerts, as well as museum and gallery exhibitions are currently able to claim an additional deduction in arriving at their profits. Where that additional deduction results in a loss, the company may surrender those losses for a payable tax credit similar to R&D tax relief. The doubling of the relief is available for the costs of the production/performance incurred between 27th October 2021 and 31st March 2023.