As Net Zero becomes a political football, can R&D tax reliefs save the world?

For anyone in the UK who has recently found themselves blinking up at the ball of burning gases that sits in the azure expanse above our heads, this is a timely reminder – that is called the sun, the sky can sometimes be blue and 50 days of consecutive rain is not normal.

The world is facing an ever-growing climate crisis and only through ambitious innovation will any of us have a planet to live on in the decades to come.

As Net Zero is increasingly treated like a political football, will R&D tax reliefs be the key to saving the world?

Why does changing opinions on Net Zero matter?

Net Zero is the legally binding contract by the UK Government to reduce its greenhouse gas emissions by 100 per cent from the levels emitted in 1990 by 2050.

There are a lot of different components that go into making it possible, but the presence of Net Zero is something of a totem of what should be achieved throughout the country.

It is a clear, definitive signal that the powers that be care enough about the environment to make it a priority.

In turn, this view may be reflected by private businesses that seek to refine their own practices to reduce the negative impact they have on the environment.

Net Zero is only possible with widespread public support, ensuring that the Government and private businesses will be held to account.

How does Net Zero impact R&D tax reliefs?

R&D tax reliefs exist to reward innovative businesses that are seeking an advance in technology and science through means that were previously thought impossible.

The push towards environmentalism is a good source of valid R&D tax relief claims, as it often involves overhauling processes or adjusting the way that materials are utilised.

Rather than being limited to one specific sector, environmental goals are a near-universal challenge that faces businesses across the board.

This aligned with a shift in public support for environmental measures as a growing awareness of the effect of climate change shaped general perception of corporate responsibility.

However, Net Zero has become a political football and this has caused a decline in public support for environmental policy.

Research by King’s College London has identified the sharp fall in public support and this may be causing innovative businesses to hesitate when committing to environmental work.

Where once sustainability was a strong source of R&D, the current tensions may see this decrease over time.

Can R&D tax reliefs bring back sustainability?

One of the strengths of R&D tax relief claims is the lack of requirement for innovation to be a commercial success.

For businesses that are committed to tackling the effects of climate change, innovation can continue even if the public drifts away.

There is a strong contingent of the public who remain focused on environmental challenges, but the cost-of-living crisis is capturing the zeitgeist above all else.

Innovative businesses may have better success in killing two birds with one stone by developing advances that are sustainable and affordable.

Treating the cost to the consumer’s wallet and the cost to the planet as the same dragon to slay may inspire advances that restore public trust in Net Zero policies.

A fear of added expenses is behind the wavering support of Net Zero, so leveraging R&D tax reliefs can enable businesses to demonstrate the power of sustainable practices.

As R&D tax consultants, we work with accounts and innovative businesses to ensure that they get the most out of R&D tax relief claims.

This means covering all eligible expenditure, even if a project was not successful and challenging enquiries to protect valid claims.

Through this, innovative companies can receive the funds needed to keep pushing towards a green agenda and a better world.

For confidence in breaking the mould and seeking better solutions, speak to our team today.

Adam Bointon