Autumn Statement 2022 - Innovative SMEs suffer due to R&D abuse measure

Steve Blacker, Head of Claims & Incentives at KPMG UK, commented:

“Innovation encouragement is moving up the foodchain after the Chancellor cut the SME R&D credit and increased the large company credit rate.

“Reducing the financial incentive to innovate for all SMEs due to abuse of the R&D tax credit regime seems a heavy handed response that will negatively impact many legitimate claimants and is out of step with an Autumn Statement that liberally namechecked innovation.

“In suppressing the rate, a policy lever for supporting the small, innovative businesses that will provide the growth the UK needs, has been weakened.

“Of course the boost to the large company R&D credit rate is welcome and, as signalled in earlier government communications, it works to support those businesses that create the most technology jobs.  But small, innovative enterprises whose management teams had factored R&D support into their business plans will now be left seeking other funding or tax relieving sources such as grants, Patent Box or business loans to bridge the gap, or may have to shelve some growth or efficiency focused initiatives.”

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For further information please contact:

KPMG Media Relations

Alison Anderson

07733 453 065

Alison.anderson@kpmg.co.uk

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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

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