R&D in the news |
Deloitte thinks the 10 % rate for R&D relief which will provide £1.1bn of extra support to R&D over the next 5 years will have a real impact on jobs and growth in the UK
The new R&D expenditure credit scheme for large companies will provide support to a wide range of industries and is predicted to provide additional relief of £1.1bn to innovative companies over the next 5 years. This together with the patent box relief which comes into effect from April this year and other measures such as the £2.1bn relief for the aerospace industry announced this week provides a strong package of support for innovation in the UK and a boost to global competitiveness. Particular beneficiaries will be large companies who do not have a tax liability as these companies will be entitled to cash credits for the first time enabling them to get an immediate benefit from the regime, and SMEs that carry out R&D subcontracted from others. This relief will therefore affect a broad spectrum of the UK economy.
The impact of the change will be the establishment of a closer connection between the relief and the R&D and technology teams. Deloitte and Industry has long campaigned for a rate of relief which is at least 10% as a double digit rate of relief is an important psychological factor.
We expect that the design of the new R&D expenditure credit will be largely consistent with that set out in the recent consultation with the exception of the PAYE/NIC cap where some detailed revisions are expected to be set out in the Finance Bill next week .
