Posted: 31 / 05 / 2024
With the UK general election approaching in a month, and polls indicating a possible shift in government, it’s essential to consider the implications for research and development (R&D) tax credits, the UK’s future economic success depends on its ability to innovate and adapt.
Labour originally introduced R&D tax credits and has expressed a commitment to maintaining the current structure in the next parliament. Additionally, Labour has indicated plans to implement ten-year budgets with the objective to provide stability and certainty for claimants. This long-term approach aims to foster an environment where businesses can plan and invest in innovation with confidence and is a very welcome antidote to the recent numerous changes.
That being said, Labour’s policy documents indicate an intention to align the R&D tax credit scheme with broader scientific missions and sustainable growth objectives. To achieve this, they propose creating a new Regulatory Innovation Office to support R&D activities and ensure a conducive regulatory environment for innovation. From what we can gather, this office would oversee the implementation of policies designed to encourage sustainable and impactful research, ensuring that R&D efforts align with national and global priorities.
The commitment to maintaining the current R&D tax credit regime is part of a broader strategy to make the UK a more attractive place for innovation. By providing certainty and stability, Labour aims to encourage businesses to increase their investment in research and development. This is seen as crucial for driving economic growth, improving productivity, and enhancing the UK’s position in the global market.
As always, the devil is in the details, and whoever wins the next general election will face significant headwinds. However, it is clear that the UK needs to innovate, grow, and critically become more productive to work its way up the global ladder. The upcoming election will be pivotal in shaping the future of R&D and business investment in the country, and Labour’s proposals offer a vision of stability and strategic alignment with long-term goals.
In summary, while challenges remain, Labour’s plans for R&D tax credits and broader business investment policies provide a roadmap for a more innovative and productive UK. The creation of a supportive regulatory environment and the commitment to long-term planning are central to this vision, promising a future where R&D can thrive and drive economic growth.
Whatever July 4th brings Sedulo will be here to support you.
For further information, contact our Innovation team:
- Josh Perry – Partner, Head of R&D – [email protected] – 07514 585 230 – LinkedIn
- Andy Nixon – Partner, Innovation Tax – [email protected] – 07960 209 500 – LinkedIn
Need more insight or help? Find your local expert now…
As one of the fastest-growing mid-tier business advisory firms, Sedulo have a wealth of advisory options open to entrepreneurs.
