Date29 Oct 2021
CategoryR&D Tax Incentives, Tax
Tim Croft, National Head of R&D at Azets has welcomed ‘promising signals’ for continued investment in Research & Development (R&D) and innovation.
Chancellor Rishi Sunak re-affirmed the Government’s commitment, with a target of overall public spending on R&D of 1.1% of GDP by the end of this Parliament.
Reforms to R&D tax reliefs available to companies were also announced, with an emphasis on modernisation, reducing of abuses, and targeting of reliefs better to effectively capture the benefits of R&D funded by the UK taxpayer.
Headline announcements included:
Tim Croft, explains “As ever, we await the detail of the proposals to understand their full implications, however there are some promising signals that the Government is taking note of the concerns that have been raised by businesses and professionals including Azets.
We welcome the widening of allowable expenditure in IT, which will considerably help the SME sector in which businesses use cloud-based solutions to enable their IT infrastructure and echoes the modern way of working.
The announcements on refocusing of reliefs towards domestic expenditure should ringfence onshore development, further driving forward UK based innovation. Along with much of the profession, our advisors have been calling for some while for abuses of the scheme to be tackled seriously, and we are pleased to hear that this is now being addressed.
We still await to hear whether R&D spending and tax reliefs will be used in a meaningful way to address the Government’s levelling up agenda and we look forward to the Treasury’s detailed plans later in the autumn, to explore the thinking behind these at the next RDCC meeting.”