Research shows that the UK's R&D tax budget has only seen a 14% increase from 2007 to 2021, while countries like Japan and South Korea have made significant investments in their R&D budgets, increasing by 134% and 119% respectively. This stark contrast suggests the UK could potentially lag behind in fostering innovation and maintaining competitiveness on a global scale as other countries ramp up their financial support for R&D initiatives.
The recently merged R&D tax scheme launched in April 2024 offers a flat 20% tax credit for qualifying expenditures. While it simplifies the process, many SMEs might struggle with diminished benefits unless they meet the 'R&D intensive' threshold, subsequently altering the innovation landscape. This raises concerns about how these changes could affect smaller businesses, which constitute a significant portion of R&D claimants in the UK.
According to Lord Philip Hammond, the key challenge is to curb fraud and errors within the R&D tax credit schemes. The need exists to ensure that while tackling issues like organized criminal activity, we do not inadvertently destroy the incentives that these mechanisms provide to honest businesses looking to innovate and compete effectively in their respective industries.
Collection
[
|
...
]