--- title: Reforms to the UK R&D Tax Credits scheme description: The budget in October 2021 outlined some significant changes to the UK’s R&D tax relief scheme. The reforms are scheduled to take effect from April 2023. image: https://blog.shorts.uk.com/hubfs/r-and-d-reforms-2021.jpg --- [![Shorts_logo_White](https://blog.shorts.uk.com/hubfs/New%20Site%202018/Shorts_logo_White.svg "Shorts_logo_White")](https://www.shorts.uk.com/) [Blogs & News](https://blog.shorts.uk.com/) > [RADIUS - R&D Tax Relief & Patent Box](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) # Reforms to the UK R&D Tax Credits scheme Darryl Hoy - 2 December 2021 ###### Select topic - Please Select - [ Audit ](https://blog.shorts.uk.com/topic/audit) [ Business Taxes ](https://blog.shorts.uk.com/topic/business-taxes) [ Radius – R&D Tax Relief & Patent Box ](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) [ Corporate Finance ](https://blog.shorts.uk.com/topic/corporate-finance) [ GENUS Management Accounts ](https://blog.shorts.uk.com/topic/genus-management-accounts) [ VAT ](https://blog.shorts.uk.com/topic/vat) [ Private Client ](https://blog.shorts.uk.com/topic/private-client) [ Payroll ](https://blog.shorts.uk.com/topic/payroll) [ EOT ](https://blog.shorts.uk.com/topic/eot) [ International Taxes ](https://blog.shorts.uk.com/topic/international-taxes) ![featured image](https://blog.shorts.uk.com/hubfs/r-and-d-reforms-2021.jpg) The chancellor’s budget in October 2021 outlined some significant changes to the UK’s R&D tax relief scheme, which we are now able to describe in greater detail. The new reforms announced are scheduled to take effect from April 2023, and will cover the following three areas: - Tackle abuse of the scheme and improve compliance - Expansion of qualifying R&D expenditure to include cloud and data services - Refocusing R&D support towards innovation in the UK ## Tightened rules to improve compliance and tackle R&D scheme abuse The government has announced a number of measures that it expects will protect the integrity of the [R&D tax reliefs](https://www.shorts.uk.com/radius/randd-tax-relief/) scheme, and tackle abuse. These measures include the following: - All claims will need to be made digitally. - Claims will require additional detail on the expenditure it covers, including the nature of the advances being sought, the field of science or technology, and the uncertainties overcome. - Each claim will need to be endorsed by a Senior Officer of the company claiming. - Companies will need to inform HMRC in advance of making a claim. - Claims will need to include details of any Agent that has advised the company on compiling the claim. - HMRC are allocating further additional resource to tackle error and abuse and will be setting up a new cross-cutting team focused on abuse. - The Government is considering further measures to discourage unscrupulous agents from exploiting the R&D scheme. | ## The importance of a robust R&D claim HMRC is continuing to increase its efforts to reduce tax avoidance, tax evasion and abuse of tax credit schemes. This is especially pertinent in the aftermath of repeated COVID-19 lockdowns and the economic cost of the government’s pandemic response. HMRC may investigate any taxpayer at any time, and this includes those who are claiming R&D reliefs. This is why it has never been more important to ensure your R&D claim is robust and compliant before submission The Radius team takes this extremely seriously, which is why our team includes a former HMRC R&D tax inspector, who carefully reviews every one of our clients’ claims before submission. [![Speak to Radius today](https://no-cache.hubspot.com/cta/default/2442072/2ee161e8-8348-4797-990e-db306262d5a2.png)](https://cta-redirect.hubspot.com/cta/redirect/2442072/2ee161e8-8348-4797-990e-db306262d5a2) | | --- | ## R&D for cloud computing and data services Technology companies, software developers and start-ups stand to benefit significantly from the introduction of Cloud and Data services into qualifying R&D expenditure. More specifically, the extension of qualifying expenditure includes licence payments for datasets, and cloud computing costs that can be attributed to computation, data processing and software. Due to the enormous amounts of data analysis, processing, and cloud computing required for many of the latest R&D projects, the government hopes that these additions will sufficiently modernise the R&D tax relief scheme. ## Focusing on UK innovation The announcements also included a commitment for greater emphasis on R&D performed in the UK, so third party labour and subcontract costs will only qualify if they are performed in the UK. The goal is to help ensure that spillovers from the R&D projects (such as the improved skills gained through research) directly benefit the UK. In addition, companies who claim for expenditure on EPWs (Externally Provided Workers) will be restricted to EPWs within UK PAYE/NIC. ## Related articles - [Autumn 2021 Budget Review: Business Tax](https://blog.shorts.uk.com/autumn-budget-2021-review-business-tax) - [What counts as software innovation for R&D?](https://blog.shorts.uk.com/what-counts-as-software-innovation) - [What qualifies for R&D Tax Relief?](https://blog.shorts.uk.com/what-qualifies-for-r-and-d-tax-relief) - [Patent Box Guide](https://info.shorts.uk.com/download-patent-box-guide) - [R&D Eligibility Checklist](https://info.shorts.uk.com/rd_tax_credits_eligibility_checklist) ![author](https://blog.shorts.uk.com/hubfs/darryl.png) #### Darryl Hoy Darryl is the Technical Director of the Radius team. He is a specialist in Research & Development tax reliefs, having previously worked at HMRC as an R&D Tax Inspector. [View my articles](https://blog.shorts.uk.com/author/darryl-hoy) Tags: [RADIUS - R&D Tax Relief & Patent Box](https://blog.shorts.uk.com/topic/radius-rd-tax-relief-patent-box) Share this on - - - [Questions? Get in touch with us](https://www.shorts.uk.com/contact/) ###### Tax Saving Guide 2026-27 Written especially for entrepreneurs and owner-managed businesses, this guide is full of planning ideas and tax risks to avoid. [ Download now ](https://info.shorts.uk.com/en-gb/tax-saving-guide) ![Tax saving guide 2026-27](https://blog.shorts.uk.com/hs-fs/hubfs/Tax%20saving%20guide%202024.jpg?width=375&height=465&name=Tax%20saving%20guide%202024.jpg) ###### Related articles ##### [Spring Budget 2023 - R&D Tax Reliefs](https://blog.shorts.uk.com/spring-budget-2023-rd-tax-reliefs) ##### [Get ready for changes to the R&D scheme](https://blog.shorts.uk.com/changes-to-the-rd-scheme) ##### [HMRC release 2025 R&D tax relief claim statistics](https://blog.shorts.uk.com/hmrc-release-2025-rd-tax-relief-claim-statistics) ##### [R&D Tax Reliefs - UK Subsidiaries of US Businesses](https://blog.shorts.uk.com/rd-uk-us-businesses) ###### Latest articles [A case of aggressive tax avoidance: Glasgow Rangers Football Club](https://blog.shorts.uk.com/aggressive-tax-avoidance-affect-you) [What is VAT? - Complete Guide (Updated for 2025/26)](https://blog.shorts.uk.com/what-is-vat) [Ashgate Hospice Sparkle Night Walk 2026](https://blog.shorts.uk.com/ashgate-hospice-sparkle-night-walk-2026) [Stocktaking guide for UK businesses](https://blog.shorts.uk.com/stocktaking-guide-for-uk-businesses) [Supporting the Chatsworth Cascade for future generations](https://blog.shorts.uk.com/supporting-the-chatsworth-cascade-for-future-generations) [Deal of the Year win at Insider Dealmakers Awards 2026](https://blog.shorts.uk.com/deal-of-the-year-win-at-insider-dealmakers-awards-2026) [Football shirt Wednesday: Backing England in style](https://blog.shorts.uk.com/football-shirt-wednesday-backing-england-in-style) [Understanding lifetime trusts: the basics](https://blog.shorts.uk.com/understanding-lifetime-trusts-the-basics) [Close company directors face new HMRC detail requirements in 2026](https://blog.shorts.uk.com/close-company-directors-face-new-hmrc-detail-requirements-in-2026) [Shorts advise Harris Irwin Architects on successful growth funding.](https://blog.shorts.uk.com/shorts-advise-harris-irwin-architects-on-successful-growth-funding) #### About Us Use this little footer to reinforce your message about who you are and why people love working with you. 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