Business and finance adviser Grant Thornton has laid out recommendations of ways to safeguard the R&D tax credit regime in a bid to ensure the UK remains competitive in the global arena. In a report entitled The Dyson effect and the future, the firm suggested ways to incentivise R&D investments and called for the continuation of both sme and large company R&D tax relief schemes.
Technology experts warned that the UK will lose its attractiveness as a place to do business if R&D benefits are scaled down or withdrawn. They also recommend that tax relief should not be restricted by sector or type of technology and that more should be done to help early stage smes and start ups. "The UK cannot afford to lose the benefits of what it has already invested in R&D," said Samantha Vanags, head of R&D tax at Grant Thornton. "The current system has been in place for 10 years and we are seeing clear benefits as the knowledge and take up of the relief continues to expand." She added that because traditional UK sectors such as manufacturing and financial services were either static or in decline, the country's future income growth was likely to come from the expansion of the 'knowledge economy' and businesses linked to intellectual property. "Over half of the G20 countries offer some form of tax relief and the Dyson report places the UK 19th in terms of attractiveness of tax credits for R&D," said Vanags. "If the UK is to remain a competitive place to do business, to attract companies from the global market and encourage companies to spend on R&D activities, it is very important that we maintain, or improve upon, the specific R&D tax reliefs offered by the UK."