Yet there are other levers the Government should pull to reinforce the UK’s position as a leader in innovation.
Commenting on the Prime Minister’s pledge to boost Government investment in R&D by an additional £2bn by the end of this Parliament, David Woodward, tax partner at KPMG in the UK, said:
“We are extremely supportive of the Prime Minister’s pledge to invest in R&D in order to reinforce the UK’s position as a leader in innovation. Particularly in the wake of the Brexit vote, it’s encouraging that the Government is looking at ways to increase the attractiveness of the UK as a place to undertake R&D. Alongside the proposed Industrial Strategy Challenge Fund, improvements to incentives, such as the Patent Box regime, will also be important in ensuring the outputs of the R&D are also commercialised in the UK.
“Thus far, the tax credit and expenditure credit regimes have proved successful for business of all sizes in driving additional investment and so broadening the scope of these would no doubt be welcomed. However, cash incentives are generally appreciated over tax relief, so any changes to these regimes must ensure the incentives result in ‘cash in hand’ to invest.
“There are a number of levers the Government can pull to encourage R&D investment: tax and grants are just one. For the UK to continue to be at the forefront of innovation on the global stage, companies must be able to employ the best people and the UK must continue to attract the best scientists, engineers and students to our great universities and colleges. As such, the Government will also need to consider their strategy across all these areas.”
For further information, please contact:
Jess Liebmann, KPMG Corporate Communications
Tel: 0207 311 3245
KPMG Press officeTel: +44 (0) 207 694 8773
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.