Budget 2013 reaction: 10% above-the-line R&D credit boost
Will the announcement help establish the UK as an attractive destination for investment?
Announced at the Autumn Statement 2011, unlike some of the Budget announcements which will take a while to come in to effect, businesses can benefit from an ‘above the line’ R&D credit at a headline rate of 10% from April 2013.
The boost comes as part of a government emphasis on the importance of business investment in new ideas and technologies.
But do business owners think it will be enough to incentivise investment?
Diarmuid MacDougall, head of Patent Box and R&D teams, PwC
“This is fantastic news for British business, especially those in high-end technology sectors such as automotive, life sciences and aerospace. Businesses with less than 500 employees will for the first time get a payable credit on R&D for customers. Many of these businesses face the risk that when they undertake R&D to develop a component for a customer, they may or may not recoup the cost when the item goes into larger scale production. Once in place, the payable credit will provide some protection against projects not reaching the production stage.”
Toby Ryland, corporate tax partner, HW Fisher & Company
“This will be welcomed by UK business and will be a further incentive for larger companies to invest in innovation, especially alongside the reduction of corporate tax rates. This will make the UK attractive to inward investors.”
Brendan Flattery, CEO, Sage UK and Ireland
“It’s essential that the UK continues to be a destination for big business and investment and continued cuts to Corporation Tax and support for R&D are good news. The UK has a strong history of innovation and that has always seen us punch above our weight on the global IP stage, and measures like those revealed today will help ensure it continues.”