Open consultation

Preventing abuse of the R&D tax relief for SMEs


This is a consultation on the measure announced at Budget 2018. This consultation will focus on how the “cap” will be applied, to minimise any impact on genuine businesses.

This consultation closes at

Consultation description

Research and Development (R&D) tax reliefs, including the small or medium sized enterprise (SME) scheme, support businesses to invest and are a core part of the government’s support for innovation. To help prevent abuse of the SME scheme, Budget 2018 announced that the amount of payable tax credit that a qualifying loss-making business can receive through the relief in any one accounting period will be capped. The cap will be three times the company’s total PAYE and NICs liability for that year and will be implemented from April 2020.

The government is consulting on how the cap will be applied, so as to minimise any impact on genuine businesses, before it is legislated in Finance Bill 2019-20. The government welcomes responses and input from businesses and their representatives currently using or planning to use the payable tax credit.


Preventing abuse of the R&D tax relief for SMEs: consultation

Ways to respond

Email to:

Write to:

Business, Assets and International
CT Innovation & Growth team
HM Revenue and Customs
Room 3C/21
100 Parliament Street

Published 28 March 2019