Boris Johnson has proposed to increase the R&D Expenditure Credit (RDEC) for large companies from 12% to 13%. This is just one of many tax breaks to woo business and is a welcome and positive indicator that the UK would continue to attract and reward innovation.
By comparison, Labour has proposed the phasing down and eventual abolition of R&D tax credits other than for SME firms younger than seven years old, and the phasing down and abolition of the patent box.
Historically, R&D tax credits have been supported by both labour and conservative governments and have only ever increased over time.
So what does this mean?
An increase should maintain the UK’s ‘mid table’ position when compared to other regimes globally.
The abolition of credits other than for young SME companies would have a hugely detrimental impact on UK innovation at a time where we need it perhaps more than ever.
We may find it hard to stay non-political on this one, apologies!
Contact us to find out more.
