As the UK general election looms just a month away, the potential for a government change is looking more and more likely as time goes by. Staying up to date with developments as an Accountancy firm with thousands of clients across the UK, we delve into what this shift could set about for R&D credits.
It’s highly likely, this change could significantly impact research and development (R&D) tax credits, a vital component for the UK’s economic growth and innovation.
R&D tax credits, originally introduced by Labour, are pivotal for fostering innovation and were introduced to support technological advances and improvements to systems that will support our economy. Labour has committed to retaining the current R&D tax credit framework if they come into power. They also plan to implement ten-year budgets to provide stability and predictability for businesses investing in innovation too. This long-term strategy aims to create a stable environment, allowing businesses to confidently plan and invest in their R&D initiatives, which we see as a welcome change from the recent period of uncertainty.
Moreover, Labour’s policy outlines an intention to coordinate the R&D tax credit scheme with broader scientific and sustainable growth objectives. A key proposal is the creation of a new Regulatory Innovation Office. This office would support R&D activities by fostering an environment conducive to innovation. It would oversee the implementation of policies encouraging sustainable and impactful research, ensuring that R&D efforts align with both national and global priorities. This would add on to Labours introduction of the scheme since the turn of the century.
Labour’s commitment to the current R&D tax credit regime is also part of a broader strategy to make the UK a hub for innovation and recognised across the world for its innovation and tech capabilities. So by providing certainty and stability, Labour aims to boost business investment in R&D, which is essential for driving this economic growth, enhancing productivity, and strengthening the UK’s competitive edge as mentioned above.
However, the details of this will be crucial should Labour win in the General election, and any new government will face significant challenges. The outcome of the upcoming election will be instrumental in shaping the future of R&D and business investment in the UK, as we know it. We feel for the better.
In summary, while challenges lie ahead, Labour’s plans for R&D tax credits and broader business investment policies provide a roadmap for a more innovative and productive UK. Their commitment to a supportive regulatory environment and long-term planning promises a future where R&D can thrive. Has your business seen success through this scheme to date? Would you like to find out how we work with clients to support R&D?
Whatever the outcome of the election, MJ Kane Accountants will be here to support your business through these changes. Feel free to contact us today and find out more.
