Call for Evidence

The Finance Bill Sub-Committee, chaired by Lord Leigh of Hurley, is appointed annually by the Economic Affairs Committee to consider the draft Finance Bill. The Sub-Committee focuses on issues of tax administration, clarification, and simplification rather than on rates or incidence of tax.

On 20 July 2022, draft Finance Bill clauses were published for consultation. The Sub-Committee’s inquiry will focus on the provisions included in the draft Finance Bill in relation to proposed changes to research and development tax relief (R&D relief).

This is a public call for written evidence to be submitted to the Sub-Committee.

The deadline for written submissions is 2 November 2022.

After it has concluded its inquiry, the Sub-Committee will make recommendations in a report to the House of Lords.

Areas of interest

The Sub-Committee invites companies which claim R&D relief, their advisers, business and trade/sectoral organisations, and other interested parties to submit written evidence to this inquiry. It would be particularly interested in the experiences of SMEs in claiming relief and how they expect the changes set out in the draft legislation to affect them.

The Sub-Committee is happy to receive submissions on any issues related to the subject of the inquiry but would particularly welcome submissions on the questions listed below. You need not address every question.

Questions

1) Have the changes to the definition of R&D gone far enough in modernising R&D relief, and if not, what more needs to be included?

2) How effective will the changes be in countering error and fraud resulting from spurious R&D claims and is there more that can be done, or different approaches that could be adopted?

3) How successful is the refocusing of the relief in encouraging activity in the UK without adverse consequences?

4) How aware are smaller businesses of R&D relief? Is there more that HMRC could be doing in practice to help smaller businesses access relief to which they are entitled?

5) How helpful is HMRC and BEIS guidance in interpreting and applying the R&D relief rules?

6) What view do you take of the requirement to give advance notification of R&D claims? What effect would you expect it to have on genuine and spurious R&D claims respectively?

7) What is your experience of HMRC’s approach to dealing with claims to R&D relief which it suspects to be invalid, either through misunderstanding of the rules, or fraud?

8) Are there lessons the UK could learn from the tax systems of other countries about how to encourage R&D

9) How successful are the changes in R&D relief likely to be in encouraging innovation and development? 

How to submit evidence

Written evidence should be submitted online using the written submissions form available at: https://committees.parliament.uk/submission/#/evidence/2741/preamble

If you have difficulties submitting online, you may submit a paper copy to: Clerk to the Finance Bill Sub-Committee of the Economic Affairs Committee. Committee Office, House of Lords, London SW1A 0PW.

As above, the deadline for submission of written evidence is 2 November 2022.

Short, concise submissions are preferred. Submissions longer than six pages should include a one-page summary. Paragraphs should be numbered. Please ensure the submission is free of logos and signatures. Submissions should be dated, with a note of the author’s name and whether the author is acting in an individual or corporate capacity. Where possible, comments on particular parts of the draft legislation should specify to which clause they refer.

All submissions made through the written submission form will be acknowledged automatically by email.

Submissions become the property of the Sub-Committee which will decide whether to accept them as evidence. Evidence may be published by the Sub-Committee at any stage. It will normally appear on the Sub-Committee’s website and will be deposited in the Parliamentary archives. Once you have received acknowledgement that your submission has been accepted as evidence, you may publish or publicise it yourself, but in doing so you must indicate that it was prepared for the Sub-Committee. If you publish your evidence separately, you should be aware that you will legally be responsible for its content.

In certain circumstances, the Sub-Committee may be prepared to accept submissions but not to publish them, in whole or in part. If you would like to submit evidence on this basis, you should first discuss this with the Clerk to the Sub-Committee.

Respondents should be careful not to comment on individual cases currently before a court of law. If respondents anticipate such issues arising, please discuss with the Clerk to the Sub-Committee how this might affect the submission.

Personal contact details will be removed from evidence before publication but will be retained by the House of Lords Committee Office and used for specific purposes relating to the Sub- Committee’s work, for instance to seek additional information.

Persons who submit written evidence, and others, may be invited to give oral evidence. Oral evidence is usually given in public and broadcast online; transcripts are also taken and published online. Persons invited to give oral evidence will be notified of the procedure to be followed and the topics likely to be discussed.

Substantive communications to the Sub-Committee about the inquiry should be addressed to the Clerk to the Sub-Committee, whether or not they are intended to constitute formal evidence to the Sub-Committee.

This is a public call for evidence. Please bring it to the attention of other groups who may not have received a copy directly.

Diversity comes in many forms and hearing a range of different perspectives means that select committees are better informed and can scrutinise public policy and legislation more effectively. Committees can undertake their role most effectively when they hear from a wide range of individuals, sectors or groups in society affected by a particular policy or piece of legislation. The Sub-Committee encourages anyone with experience or expertise of this issue to share their views, in the full knowledge that their views have value and are welcome.

Progress of the inquiry may be followed at https://committees.parliament.uk/work/6942/draft-finance-bill-202223/