R&D tax credits expected to cost Treasury £7.5bn this year

Estimates come amid major shake-up of tax relief—including cuts to support for small businesses

R&D tax credits are expected to cost the Treasury £7.5 billion this year, rising to over £9bn by 2027, according to forecasts.

The estimates come amid a major shake-up of the tax relief scheme, which works by reducing innovative businesses’ liability to corporation tax, or through making a direct payment to a company.