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Scottish independent accountancy firm, Henderson Loggie, has urged the UK government to provide businesses with a “clear and comprehensive” tax roadmap in the upcoming Budget.
It comes as Scotland’s businesses face ongoing economic uncertainty, which the firm believes could be mitigated by long-term tax clarity to strategic planning and investment.
Over the past 18 months, Scotland’s businesses have faced multiple budgets and one complete U-turn on key UK fiscal policies.
According to the head of tax at Henderson Loggie, Kimberley Thomson, a defined tax strategy will be essential to support growth, innovation and global competitiveness.
Thomson said: “When tax policies are unpredictable, businesses struggle to forecast future tax costs, making it difficult to accurately project profit margins. A clear tax roadmap is essential, especially for smaller businesses which often lack in-house tax teams and require time to understand and adapt to potential changes.
“Changes to R&D tax legislation and HMRC’s recent approach to enquiries have made SMEs hesitant to claim under the scheme, partly because they are not sure of the rules and because they are concerned about the time and money it will take to defend a smaller claim.”
In 2023, the UK government introduced changes to support companies with substantial R&D spending relative to their total expenditure. However, critical legislative provisions were accidentally omitted from the Finance Bill 2023, leaving the rules incomplete and causing widespread confusion.
The government’s response in 2024 involved introducing the missing provisions retroactively, allowing companies to apply the rules as if they had been in place from the original start date. While this correction provided some relief, the initial delay resulted in increased administrative burdens, and potential financial strain for businesses.
Thomson added: “R&D is a good example of how to complicate the system further while trying to simplify the relief to a merged scheme. A structured tax roadmap for R&D or creative relief in general would have provided businesses and Treasury with the necessary timeline to prepare and might have prevented such oversights.
“Clear communication and comprehensive planning from the government are essential to ensure that businesses can navigate tax changes effectively, without facing unnecessary challenges and costs.”
