R&D and creative industries tax reliefs

Companies may be entitled to corporation tax relief in respect of qualifying expenditure that they incur on research and development (R&D). At Spring Budget 2021, a review of the R&D tax reliefs was launched, which concluded with the announcement at Autumn Statement 2023 of a merged R&D relief scheme. The review generated a period of change and transition for these reliefs. Separate corporation tax incentives are available for certain creative industries productions, including the audiovisual expenditure credit (AVEC) for qualifying British films and television programmes (see: Audiovisual expenditure credit below).

For accounting periods beginning before 1 April 2024, the conditions that must be met, and the value and form of the R&D tax relief available, depend very significantly on whether a company is a small or medium-sized enterprise (an SME), or a large company, for these purposes.

For such accounting periods, R&D tax relief is available in the following forms (referred to below as the pre-1 April 2024 schemes):

1. •

   relief for SMEs by way of:

   1. ◦

      an enhanced deduction (186% of qualifying expenditure for expenditure incurred on or after 1 April 2023) in computing...