Enterprise Tax welcomes the announcements in the Autumn Statement of a continued commitment to stimulate R&D in the UK including improvements to already favourable R&D tax incentives.
Announcing several initiatives that will have a significant impact on the R&D spend of UK business, Philip Hammond stated “we do not invest enough in research, development and innovation. As the pace of technology advances and competition from the rest of the world increases, we must build on our strengths in science and tech innovation to ensure the next generation of discoveries is made, developed and produced in Britain.”
A new National Productivity Investment Fund (NPIF) was announced. The NPIF will add £23 billion in high-value investment from 2017-18 to 2021-22. The government will target this spending at areas that are critical for productivity: housing; research and development (R&D); and economic infrastructure.
The government also pledged to review the tax environment for R&D to look at ways to build on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place to do R&D. Any changes to R&D tax credits is likely to have to wait until after Brexit as any changes before then would require EU approval. But once the UK is free to make its own rules in this area such incentives could be a very effective way to stimulate GDP post-Brexit.
If you have any queries in relation to R&D tax incentives contact Sharon Collier at Enterprise Tax Centre.