Among the many talking points from Jeremy Hunt’s Autumn Statement was how his changes affect businesses, particularly small and medium-sized enterprises (SMEs). With the personal allowance frozen at £12,570 until 2028, the additional income tax threshold reduced from £150,000 to £125,140 and the national living wage increased to £10.42, the cost to entrepreneurs and small firm owners is vast. 

 

One area that slipped under the radar is changes to research and development (R&D) tax relief for SMEs and larger companies. SMEs, defined as companies with up to 250 employees, will see the “enhanced deduction” available to them decrease from 130% of qualifying R&D expenditure to 86%. Furthermore, the R&D payable cash tax credit will decrease from 14.5% to 10%.