Last year, the Government announced the largest ever expansion in R&D support to £22 billion per year by 2025. Today’s Budget is somewhat lighter in support for R&D intensive businesses.
One of the main headlines is the rise in Corporation Tax to 25% by 2024-5. It’s likely to have an indirect impact on the level of R&D that businesses can support, as there’s less profit available to invest over the approaching financial year.
While the rise in Corporation tax will mean that some R&D investment may decline, those who do invest will be looking at the new “super deduction” UK tax relief scheme announced today, where companies investing can reduce their tax bill by 130 per cent of the cost. This could be an incentive for the private sector to double down on R&D and help secure the UK’s position as a global innovation leader.
The chancellor also announced a £12 billion Infrastructure Bank with a remit to invest in projects that help meet the government’s target of net zero emissions by 2050. Historically, government investment vehicles sound promising but they can prove difficult to navigate for individual businesses. For this reason, expect to see new multi-partner strategic alliances emerge in order to access this fund and help deliver Net Zero. #budget #innovation