New proposals from the government to issue tax credits for research and development (R&D) work will make it easier for US companies and SMEs looking to expand into the UK market.
The proposals include removing the minimum R&D spend rule and the cap on tax credits payable to loss-making SMEs, in addition to implementing an advance clearance system.
Investment in R&D tends to be low, with UK companies reluctant to incur the expenditure and foreign companies planning a presence in UK seeing it as a necessary but high cost. The tax credits are therefore likely to encourage an increase in investment and as studies have shown that R&D improves innovation and productivity, benefits may be seen across the entire British economy.
The new proposals are straightforward, with a minimal administrative burden attached to them and it is estimated that at least 6,500 companies stand to benefit from the proposals every year. Any companies seeking advice on how to claim these tax credits should talk to their accountant.