If you are writing about the Government consultation announced yesterday on the support that R&D tax credits provide for innovation and the proposals of the Dyson Review, please consider the following comment from Samantha Vanags, Technology partner at Grant Thornton UK LLP.
Samantha Vanags, Technology partner at Grant Thornton, says: “The consultation considers whether relief be focused on high-tech companies because of their particularly strong link to R&D. While this isn’t defined, we wouldn’t want the scheme to be withdrawn from companies that allocate only a small proportion of their overall spend to R&D. If innovation is driving future income for the UK we believe it should be incentivised, regardless of the shape and size of the investing company, and that relief should not be limited by yet another condition.
“The UK will lose its attractiveness as a place to do business if R&D benefits are scaled down significantly. This may also hamper progress in technology and innovation and discourage businesses entering from global markets.”
Vanags also advises that R&D tax relief should not be restricted by sector or by type of technology. She says, “Our clients’ experiences show that R&D is pursued in a wide range of sectors, including – but in no way limited to – life sciences, manufacturing, engineering and IT. Companies of every size, in all of these sectors, are investing in the UK’s future income streams. Therefore, we believe that removing companies from the scheme by reference to their size or their sector would negatively impact the economy.
“While we welcome a review of the R&D tax regime, more focus needs to be on helping early stage SMEs and start-ups, which face higher barriers to maintaining a sustained R&D programme. These schemes clearly offer real cash incentives to companies without a major administrative burden or cash spend for the Government. We recommend that this goes further by, for example, increasing the rate of cash-back offered to early stage companies when they surrender losses.”
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