BIA response to HMT consultation on Preventing abuse of the R&D tax relief for SMEs second consultation

The BIA has responded to a second consultation on the proposed PAYE cap on R&D tax credits, welcoming the relaxation of a stringent cap that would have been extremely damaging to the UK biotech SME community. The change in government approach comes after a BIA-led campaign and a series of meetings between the BIA’s Finance and Tax Committee and Treasury officials, in which alternatives to the initial cap design were discussed. The new approach will allow most biotech companies to be exempted from the cap, which is intended to prevent abuse of the scheme by overseas companies and not impact genuine companies.