At the current pace of investment, the UK will miss its 2.4% R&D target by £19bn in 2027, according to a new report from the CBI.
The report argues the government should help stimulate private sector investment by ensuring the R&D tax credit keeps pace with the changing nature of R&D and international competitors. The way businesses conduct R&D increasingly involves data and analytics, as well as outsourcing R&D activity to companies with specialist skills.
The CBI calls on the government to widen the scope of eligibility for the R&D tax credit to include:
capital expenditure;
data driven innovation;
outsourcing of R&D activities, where this is not already captured; and
upskilling and retraining of staff.
Government should also review the availability of data on private sector R&D investment to help monitor and evaluate the effectiveness of its R&D policy and regularly benchmark the tax regime against international peers to ensure the UK remains competitive.
CBI Director of Economic Policy, Annie Gascoyne, commented: ‘For many businesses the significant upfront capital costs are stopping them from investing more in R&D. Pound for pound, the R&D tax credit drives more investment by business than it costs the government. The tax credit could be the motor to propel the economy forward, but only if it keeps pace with the changing nature of R&D, so it must widen in scope, if the UK is to remain a world-leader in innovation.’
In 2016/17 R&D tax incentives cost the government £3.4bn, supporting a return of £24.9bn of expenditure.
Read the report, ‘Untapped investment: the importance of the UK’s R&D tax incentive regime in meeting the UK government’s R&D target’, bit.ly/2m0Tmhu.
At the current pace of investment, the UK will miss its 2.4% R&D target by £19bn in 2027, according to a new report from the CBI.
The report argues the government should help stimulate private sector investment by ensuring the R&D tax credit keeps pace with the changing nature of R&D and international competitors. The way businesses conduct R&D increasingly involves data and analytics, as well as outsourcing R&D activity to companies with specialist skills.
The CBI calls on the government to widen the scope of eligibility for the R&D tax credit to include:
capital expenditure;
data driven innovation;
outsourcing of R&D activities, where this is not already captured; and
upskilling and retraining of staff.
Government should also review the availability of data on private sector R&D investment to help monitor and evaluate the effectiveness of its R&D policy and regularly benchmark the tax regime against international peers to ensure the UK remains competitive.
CBI Director of Economic Policy, Annie Gascoyne, commented: ‘For many businesses the significant upfront capital costs are stopping them from investing more in R&D. Pound for pound, the R&D tax credit drives more investment by business than it costs the government. The tax credit could be the motor to propel the economy forward, but only if it keeps pace with the changing nature of R&D, so it must widen in scope, if the UK is to remain a world-leader in innovation.’
In 2016/17 R&D tax incentives cost the government £3.4bn, supporting a return of £24.9bn of expenditure.
Read the report, ‘Untapped investment: the importance of the UK’s R&D tax incentive regime in meeting the UK government’s R&D target’, bit.ly/2m0Tmhu.
