Research and Development Funding was Increased in the November UK Budget 2017
The government was very upbeat in their support for more investment into research and development. Despite some negative comments by IPPR a few days earlier, research and development funding was increased in the November UK Budget 2017.
Research and development investment is seen as a key plank in increasing productivity and providing more skilled and better-paid jobs. The Government’s vision is of:
“An economy driven by innovation that will see the UK becoming a world leader in new technologies such as Artificial Intelligence (AI), immersive technology, driverless cars, life sciences, and FinTech”
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The announcements included – “Research and development expenditure credit – The government will increase the rate of the R&D expenditure credit from 11% to 12% with effect from 1 January 2018”
Research and development expenditure credit (RDEC) is claimable by large companies with over 500 employees. This increase raises the benefit for profitable companies to a net corporation tax reduction worth 9.6% (up from 8.8%) of their relevant expenditure on R&D activities (assuming a 20% corporation tax rate).
The Small and Medium Enterprise (SME) R&D tax credit remained unchanged as it is already very generous, providing an additional subsidy of between 18% and 33% of relevant expenditure on R&D activities.
Increases also included “£170 million for innovation to transform productivity in the construction sector”
“UK Games Fund – The government will provide a further £1 million to extend the UK Games Fund until 2020, aiding access to finance and business support for early stage video game developers.”
“Establishing a new £2.5 billion Investment Fund incubated in the British Business Bank with the intention to float or sell once it has established a track record”
“Doubling the annual allowance for people investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) and the annual investment those companies can receive through EIS and the Venture Capital Trust scheme, and introducing a new test to reduce the scope for and redirect low-risk investment, together unlocking over £7 billion of growth investment.”
There has certainly been a buzz around the success of some of our home grown tech companies – as illustrated in The Deal Q3 2017.
Are you ready to find out if you qualify or how much your R&D claims could be worth?