Response to the Budget November 2017
- 22 November November 2017
- Budget, Autumn 2017, RDEC, tax relief, 12%,
Against a backdrop of tough macro-economic environment conditions, MMP Tax is pleased by the announcements made today by the Chancellor of the Exchequer, Philip Hammond, expressing the continuation of critical support for innovation, research and development.
The Chancellor stated that he was listening to the voice of business, and that he had reviewed, with business, the R&D tax credit regime and had concluded that in his opinion, it is globally competitive.
He went on to say, ”to make the UK even more attractive for R&D we have accepted industry calls for a reduction in administrative burdens around the scheme and will shortly bring forward measures to deliver them”.
The large company scheme, named
Research and Development Expenditure Credits, (“RDEC”), (the corporate tax incentive scheme designed to encourage UK investment in large R&D projects); is given a further increase in generosity from 11% of eligible expenditure to 12% of eligible expenditure incurred from January 2018, a change warmly welcomed by MMP.
There was no mention of the EU science funding programme, Horizon 2020, the €80bn (£71bn), or how this might be replaced or supported by the UK post Brexit.
There was no mention either of any changes to the Patent Box regime,
Video Games Tax Relief (“VGTR”) or
Animation Tax Reliefs (“ATR”) in this budget. Whilst unquestionably helping all types of businesses, the continued reduction of Corporation Tax means that the incentives provided to encourage small companies developing video games and animation as well as smaller R&:D projects; are, by virtue of the way the tax reliefs are calculated, become less generous than they were at introduction.
David Marshall, Director at MMP Tax Limited, commented: “Investment in our countries technology sector has proven to be critical for sustained economic growth and the development of intellectual property crucial to our position on the world stage. We welcome the governments’ continued support and enhancement to them”. “Anecdotally, many companies continue to claim these reliefs incorrectly which HMRC will no doubt tighten their grip on, alongside reducing the administrative burden”.
Read the full press release here