Reflecting upon The Queen’s Speech
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Reflecting upon The Queen’s Speech
As we approached last month’s General Election, I outlined my thoughts on Boris Johnson’s proposals to implement a range of tax breaks should he be successful in the polls.
A couple of weeks on from the result, a clearer picture is starting to form as we enter a new year and a new decade.
The UK will leave the EU. Climate change has never been higher on the socio-political agenda. Healthcare provision is under a pressure so great that would have inconceivable at the conception of the NHS. Advancements in technology are seemingly never-ending.
The world keeps turning and we – businesses across the UK and Ireland – continue to move and adapt.
It’s often said that change brings opportunity and with that opportunity can help bring about growth.
That much was certainly evident in The Queen’s Speech, where there was plenty to say about R&D incentives.
The Government notes that R&D is “vital” to a productive economy, as well as stating that “firms that invest in R&D have around 13% higher productivity that those that do not invest.”
Delving further into The Queen’s Speech, the Government has made a firm commitment to maintain the UK’s position as a global science superpower, as it has announced it will boost public R&D funding. It noted that it is already increasing public spending on R&D by £7bn over the course of five years, which they claim is the biggest increase in public funding on record.
Mr Johnson looks set to deliver on his pre-election promise as the speech notes an increase in the R&D tax credit rate to 13%. As I previously noted, whilst that may not seem like a substantial increase, when it comes to receiving tax credits for R&D activity, this could make a big difference to a business.
But what is also interesting is the pledge to review what R&D-related costs qualify for tax credits. Now this is particularly interesting: functions which boost productivity and innovation – such as investments in cloud computing and data – will also be incentivised.
That will be a real game changer for businesses and will undoubtedly prove invaluable to many.
There are reasons why the Government has incentives like these in place – they help stimulate the economy, which is a top priority for anyone that sits in Number 10. Whilst many companies are making use of such incentives, there are still those who think it isn’t for them or are not maximising their claims to full effect.
That is why it is important that with increased incentives available, businesses should be looking to partner with specialised and trusted specialist advisors to proactively maximise and manage their R&D tax credit claims in a compliant manner.
The Momentum Group works closely with progressive and innovative SME and large companies across the UK and Ireland to strategically advise and manage this complex and specialised area.
As a trusted partner, using our expertise, experience and insight, Momentum can optimise the benefit for R&D activity so that relief can be channelled back into the company to facilitate future business growth and prosperity.
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14 December 2020 | By Nico Fell