Contact: James Igoe
Deloitte
Public Relations
+44 (0)20 7303 8247

UK business will welcome today’s announcement regarding the extension of the R&D tax regime.  The Government announced its intention to increase the rate of relief for SMEs to 175% of qualifying R&D expenditure and 130% for larger companies. In addition, the Government also announced it will extend the definition of the SME regime to companies with between 250 and 500 employees, a move that was announced originally in the 2005 Pre-Budget Report.

Speaking in response to today’s announcements, David Cobb, head of R&D tax at Deloitte, said:

"This has gone further than we expected and along with the establishment of the specialist R&D units reflects the Government’s enthusiasm for encouraging innovative activities in the UK.  Even after taking into account the various changes in the corporation tax rates in the coming years, the net benefit of the relief should be greater for SMEs and Large companies.

“There is no increase to the net benefit loss making SMEs can realise through claiming the cash credit but at a benefit of up to 24% this was already very generous.

“The reduction in the rate of capital allowances from 25% to 20% makes the benefit of claiming research and development allowances on capital expenditure even more valuable and this relief should not be overlooked.”

For further comment from David Cobb please call our Budget press hotline: 020 7007 3333.

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