Autumn Budget Released

After weeks of speculation, the Autumn Budget 2024 delivered stability for businesses focused on research and development. The government upheld its promise to maintain the current R&D tax relief structure, offering companies predictability maintaining the Merged R&D Expenditure Credit and Enhanced R&D Intensive Support (ERIS) frameworks.

Raised Costs for Employers

A key measure was the increase in employer National Insurance Contributions from 13.8% to 15%, alongside a reduction in the threshold for contributions from £9,100 to £5,000. While this raises costs for employers, R&D tax relief will help offset expenses tied to R&D staff. Small businesses will gain some relief from an increased Employment Allowance, now £10,500.

Prioritising Innovation

The Budget reinforced innovation with a £20 billion R&D allocation through 2025-26, targeting sectors like aerospace, electric vehicles, life sciences, gigafactories, and green hydrogen. Corporate tax remains capped at 25%, with incentives like the Patent Box and full-expensing Capital Allowances preserved.

Improved Access to R&D Tax Relief

HMRC modernisation and expanded compliance efforts aim to reduce fraud and improve access to R&D tax relief. Additionally, 10-year R&D budgets signal a sustained commitment to innovation, providing reassurance amid rising costs elsewhere.