What are the Key Changes?

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The good news is that R&D expenditure categories will be extended to include the costs of datasets and cloud computing – however, these costs need to clearly align with direct R&D and cannot be included in R&D claims where these costs only relate to indirect supporting activities.

In addition to this, R&D in pure mathematics will now qualify for relief and can form part of the qualifying R&D activities of the claimant.

Refocusing the Reliefs Towards Innovation Undertaken in the UK
One of the most fundamental changes in the Autumn Budget was to refocus the relief provided to activities performed in the UK or qualifying overseas expenditure.

UK Expenditure
Relevant research and development must be undertaken in the United Kingdom. As such, jordan mobile database subcontracted R&D work, and the cost of externally provided workers (EPWs), will be limited to work undertaken in the UK.

Qualifying Overseas Expenditure
The exemption to the above, is where work undertaken outside the UK is necessary due to geographical, environmental, or social conditions not present or replicable in the UK.

The cost of the work, and availability of workers, are specifically excluded as factors. This list is not exhaustive and, in the short term, is likely to create greater uncertainty as to what might be seen as meeting these criteria.

It is worth noting that, to date, there is nothing in the draft legislation that specifically addresses claims for the cost of staff working on projects in an overseas branch of a UK entity – it is hoped this will be clarified as the Bill goes through the Parliamentary process.