There is no doubt that the new Autumn Budget has brought in some big changes for business owners, with those claiming R&D tax credits set be impacted in a potentially significant and positive way. The key theme of the budget is paving the way not only for economic recovery but also laying the groundwork for establishing the UK as a centre for technological and scientific advancement.
This is clearly seen by the broadening of qualifying activities which sees a shift towards including more technological challenges that business face. Most noticeably this includes cloud computing and data costs, which means more business than ever will be eligible to claim research and development tax credits.
In addition to broadening the scope of activities, the Government has also committed to supporting British business owners by increasing the funding to those carrying out R&D in the UK. This is seen in the removing of support given to those carrying out R&D overseas. Not only will this draw further innovative business activities within the UK through governmental financial support, but it will also incubate an environment of collaboration and innovation.
The budget also announced a continued commitment to R&D investment with a target of annual spend of £22bn set for 2024. In order to support the increase, the government has committed to increasing spending by 50% up to £20bn a year for the next two years. This will help nurture an atmosphere of advancement as business owners will feel supported whilst establishing a new way to support their processes. These increases in spending will equate to R&D tax relief spending accounting for 1.1% of total UK GDP.
The key takeaway from the Autumn Budget announcement is that the government is committed to “making the UK a science and technology superpower.” They hope to achieve this through continued financial support, investment in UK based activities and broadening of eligible R&D activities. It is clear that R&D tax credits will play a crucial role in the Governments commitment to “levelling up” campaign.