On 24 April, techSPARK and S&W hosted a closed-door roundtable at S&W’s Bristol office, bringing together a diverse mix of businesses across sectors including quantum technology, software, telecoms, and engineering from early-stage scale-ups to more established mid-sized firms as well as founders, CFOs and innovation leaders from across the South West’s tech ecosystem.
The session focused on the future of R&D tax relief, a vital incentive for innovation, which has been subject to significant change and scrutiny in recent years.
With HMRC’s evolving compliance regime and a new government consultation underway, the event provided a timely platform for high-growth businesses to share experiences, frustrations and constructive feedback on how the scheme can better serve innovators.
A Crucial Moment For Change
Opening the session, Katherine Colledge from S&W outlined the backdrop to the consultation. While the current government has expressed a commitment to supporting R&D through tax incentives and maintaining scheme generosity, uncertainty remains – largely driven by recent reforms and increasingly aggressive compliance activity from HMRC.
“The key message from the government is ‘stability’,” she noted, “but that follows a period of instability. Businesses are still navigating the series of changes brought in from 2023 onwards, creating substantial complexity.”
Colledge highlighted that while measures to tackle fraud and error were necessary, the resulting impact on genuine R&D claims has often been damaging, creating a chilling effect on innovation investment and business planning.
The Real World Impact
The Real-World Impact Attendees shared candid accounts of how HMRC’s current approach has affected their operations. Several companies described long delays, aggressively worded letters, and opaque investigations that have led to job losses, paused investment rounds, and board-level anxiety.
One participant described how a single HMRC letter led to an immediate reconsideration of their hiring plans and a significant reduction in workforce, despite their claim later being approved in full. Another shared that a pending enquiry had derailed an acquisition deal and caused a significant drop in company value.
These examples underscored a key theme: it’s not whether companies are doing R&D, but the unpredictability and burden of the process that’s doing harm.
Key Themes: Certainty, Experience and Trust
Key Themes: Certainty, Experience, and Trust One participant summed up a sentiment echoed by many around the table: “It’s not just about compliance – it’s about trust. If we knew HMRC’s decisions were consistent and grounded in real understanding, businesses could plan, grow, and innovate with confidence.”
The consultation asks stakeholders to weigh three priorities: reducing fraud, improving customer experience, and providing certainty.
The roundtable clearly placed the greatest weight on certainty – both in how claims are assessed and in HMRC’s timelines and conduct. Participants also stressed the need for a better experience. Many had endured long, unstructured information requests, poor communication, and a lack of technical understanding from case officers. One attendee likened the process to “dealing with an insurance call centre, but worse”.
There was strong support for introducing mechanisms to offer more upfront assurance for R&D claims, either before or shortly after submission. But participants cautioned that without addressing the underlying issues – inconsistent decision-making, lack of sector expertise, and poor communication – even well-intended reforms would fall short.
Constructions Recommendations
Suggestions emerging from the discussion included:
- Expanded advance assurance: Currently only available to first-time claimants, participants backed extending this to experienced claimants, particularly those who have been through compliance checks and want to re-enter the scheme with clarity.
- Use of expert panels: Drawing from Innovate UK’s model, there was support for HMRC to work with technical experts from industry or academia to assess R&D claims more fairly and consistently.
- Enhanced agent involvement: Many attendees rely on professional advisers to prepare claims. Recognising qualified agents and enabling more collaborative compliance checks could ease burdens on both sides.
- Clarity on what constitutes ‘material change’ in a project, to help businesses understand when and how upfront assurance remains valid.
- A tiered approach to assurance: Balancing faster processing with varying levels of scrutiny, based on claim size, company history and adviser involvement.
Jenny Tragner, Partner at S&W, emphasised the importance of engaging with the consultation process:
“I genuinely believe that if we engage in the right way, we can affect policy change. That’s why groups like this, and partnering with techSPARK, give us a powerful opportunity to shape that feedback into actual recommendations.”
Next Steps
techSPARK and S&W will compile the insights from the roundtable into a formal response to the government’s consultation, which is open until 26 May 2025. Attendees were also encouraged to submit their own views individually, reinforcing the collective message.
As Ben Shorrock, Managing Director of techSPARK, said in closing:
“This isn’t just about fixing problems – it’s about making sure R&D tax relief continues to be a powerful tool for growth. Honest conversations like this give us the chance to shape better policy and rebuild trust in the system.”
