§ Lord Taylor of Warwickasked Her Majesty's Government:
Whether small and medium-sized companies will have to repay tax credits under the research and development tax credit scheme, due to confusion over the definition of "research and development" [HL5300]
§ The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)If a company claims an R&D tax credit to which it is not entitled, the error will be handled in the same way as for any incorrect tax return. There is no question of requiring companies to repay R&D tax credits where they have been claimed correctly.
At the time of the introduction of the credits in 2000 the Government acknowledged that they would want to revisit the definition of qualifying research and development (R&D) in the light of experience. The defining innovation consultation has recently closed and the Government are currently considering the responses so that the definition of R&D is even clearer.