R&D tax credit ‘needs retaining’

The Confederation of British Industry (CBI) is calling on the government to maintain its commitment to the research and development (R&D) tax credit, after a study demonstrated its advantages.

According to the organisation’s R&D Tax Credit Survey, the ‘improved and user-friendly’ scheme should be supported, as it is favoured by companies and is especially useful during a recession.

Findings from the research reveal that business confidence in R&D tax credits has increased significantly, while between 2005 and 2008 firms doubled their savings on innovation activities through the initiative.

The study also shows 90 per cent of companies intend to apply to the scheme again, while 37 per cent have increased their R&D projects because of it.

Richard Lambert, CBI director general, comments: ‘The government must recognise the value of the R&D tax credit and commit to retaining it and encouraging more firms to invest in research and development.’

He also calls for the scheme to be expanded to allow more businesses to apply and cover more of their associated overheads.

Recent figures from the Department for Innovation, Universities and Skills reveal the top UK firms increased their spending on R&D over 2007 to reach £21.6 billion, an increase of six per cent on the previous year.

Related Topics

R&D Tax Credits