David Woodward, R&D Tax Partner at KPMG Comments on the decision to increase R&D tax relief to 12%.
David Woodward, R&D Tax Partner at KPMG, said:
“Increasing the R&D Expenditure Credit (RDEC) to 12% means that, net of corporate tax, the Government will contribute £10 for every £100 of R&D expenditure by business. RDEC, recognised in a company’s accounts as income, plays a key role in encouraging global businesses to choose the UK as a location for their R&D. Coupled with the £2.3bn R&D grant boost that was announced on Monday, the increase is a welcome surprise that will send a very positive signal that the UK is an attractive place for innovation.
“If the Chancellor wants to achieve the vision he set out in the Budget for Britain there are two key issues he needs to address - productivity and ensuring the UK has advanced products and services to allow it to compete in a global market, particularly following Brexit. He has quite rightly identified that the key to addressing these issues is innovation, so it is great news that he has continued to invest in both R&D grants and credits.
“We now look forward to the imminent industrial strategy white paper, which will hopefully help produce a cohesive strategy addressing the entire product lifecycle.”
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