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”
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