Photo credits to gov.uk
Jumpstart, the UK’s leading R&D tax relief specialist, welcomes the focus on innovation in the 2017 budget. Scott Henderson, Jumpstart’s Managing Director commented:
“The plan to bring UK R&D spending into line with the world’s other rich nations within a decade is just the fillip that businesses need against the backdrop of Brexit uncertainty. The commitment to improve productivity signals that Britain is serious about maintaining its primary role as a trading nation.”
In the budget the Chancellor announced:
- an increase in Government spending on R&D of a further £2.3 billion in 2021-22, taking total spend on R&D in that year to £12.5 billion. The industrial strategy white paper will provide further detail on this.
- that the R&D Expenditure Credit (RDEC) rate is being increased from 11% to 12% on 1 January 2018. This is the the rate which applies to large company R&D tax relief.
Mr Henderson continued:
“Whilst welcoming the increase in the RDEC rate, it’s disappointing not to see a similar increase in the relief available to SMEs. 83% of claims in 2015/16 were from SMEs – with a cost to the treasury of £1.3bn. Large company and RDEC claims cost the Treasury £1.5bn – yet only large companies are benefitting from a rate increase.”
“There is a danger which must also be addressed: that too much support in the levels of Government spending on R&D could have the counterproductive effect of increasing dependency on the public purse. The ideal situation is to create a business and innovation environment which convinces companies of the commercial virtues of making their own investments in R&D. This budget goes a long way to achieving that goal.”
The Chancellor also announced:
- plans to unlock over £20 billion of new investment to finance growth in innovative firms. This 10-year action plan includes:
- a new Investment Fund within the British Business Bank
- extending and re-directing investment through the Enterprise Investment Scheme
- removing barriers to growth within Entrepreneur’s Relief
- supporting long-term investment by pension funds and other investors
- a major package to ensure the UK is a world leader in electric cars, including:
- £200 million government investment, matched by the private sector, in a new £400 million fund to support the growth of chargepoint companies across the UK
- an extra £100 million of NPIF funding for the Plug-In Car Grant to help consumers with the upfront cost of battery electric cars
- regulatory measures to accelerate the deployment of charging infrastructure
- expansion of the ‘Tech City’ concept to become a ‘Tech Nation’ to help people start and grow a digital business anywhere in the UK. This will roll out support programmes to new hubs in Cambridge; Bristol and Bath; Manchester; Leeds and Sheffield; Newcastle; Reading; Birmingham; Edinburgh and Glasgow; Belfast; and Cardiff.
