In response to the OBR’s gloomy forecast for the UK’s GDP, the Chancellor responded with his plans for investing in the UK to raise productivity by investing in R&D.
Along with direct funding, the Chancellor gave big businesses a boost with R&D tax credits. Large enterprises will get a 1% increase in the rate of Research and Development Expenditure Credits (RDEC) to 12%. This will give businesses a net return of 9.72% on their R&D expenditure.
The new rate for the RDEC will come into effect from 1 January 2018 – a more immediate change to get companies spending in the new year. Meanwhile, the reduction of corporation tax to 17% by 2020 will stay on track.
There are also plans for an ‘Advanced Clearance Service’ for the RDEC, which we expect will operate similar to Advanced Assurance available to SMEs.
The Budget shows the Government is intent on the UK remaining an attractive prospect for innovation and productivity.
Wondering how much R&D tax relief you could claim? Find out with our tax calculator.