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The Autumn Finance Bill 2024 introduces significant R&D tax relief reforms for loss-making, R&D-intensive small and medium-sized enterprises (SMEs) registered in Northern Ireland. Effective for claims filed after 30 October 2024, these provisions aim to simplify the relief process and encourage innovation. Once the bill receives Royal Assent, the new rules will be backdated to this date.
Key Changes for Northern Ireland SMEs
✅ Enhanced R&D Incentive Scheme (ERIS): Available for SMEs engaged in goods trading or electricity-related services.
✅ No restrictions on overseas contractor payments: Unlike UK-wide rules, Northern Ireland SMEs can claim relief for externally provided workers (EPWs) abroad.
✅ Opt-out option: SMEs not trading in goods or electricity-related activities can notify HMRC to align their claims with UK-wide R&D relief rules.
✅ Research and Development Expenditure Credit (RDEC) Scheme: Open to all UK-registered companies meeting eligibility criteria.
✅ De minimis state aid limit: Cumulative benefits of ERIS and other state aid must not exceed €300,000 over three years (lower for agriculture and fisheries).
Compliance and Reporting Requirements
SMEs must track state aid receipts, ensure their claims comply with de minimis limits, and submit verified claims through an additional information form to HMRC. Non-compliance can lead to penalties and claim withdrawals.
These reforms aim to streamline R&D tax relief, boost SME-led innovation, and drive economic growth in Northern Ireland. Businesses should assess their eligibility and ensure compliance to maximize their tax benefits.
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