R&D SMEs at risk due to tax credit scheme change

The BioIndustry Association (BIA) has announced that changes to small and medium enterprises (SME) research and development (R&D) tax credit schemes could harm a thriving sector. This is because the Government is proposing to introduce a cap on the value of cash payments loss-making SMEs can receive through the R&D tax credits scheme, which are a valuable source of finance for young companies trying to get from one venture capital fundraise to the next. Despite Government claims that it is exploring options to reduce the impact on ‘genuine companies’, a public consultation was launched in March and will close on 24 May, detailing that cash claims would be capped at three-times the PAYE and National Insurance Contributions (NIC) liabilities of a company.