R&D reform: a single RDEC lane for all?

HMRC is consulting on one potential simplified R&D tax scheme to replace the existing SME and RDEC schemes. This proposal builds on wider reforms already proposed to the UK’s R&D tax regime and may be a logical next step following the recent decision to narrow the gap in the levels of support between each scheme? There is much to be considered in the design of a merged scheme, including how subcontracted and subsidised R&D is treated, whether there should be a cap on payable credits, and how to balance competing interests given a fixed pot of support. Innovative companies are already wrestling with unprecedented reforms, so the focus should be on a simple, targeted and competitive regime which drives growth.