In response to the Chancellor's Autumn Statement announcement, Dominic Preston, Head of Innovation at business and financial adviser Grant Thornton UK LLP, comments on the implications for the changes to Research and Development tax credits and related deductions for mid-sized businesses (MSBs):
“Following the recent proposed changes to the patent box tax relief, it was a shame that the Chancellor made no specific mention of the future of the patent box in the Autumn Statement.
“It is suspected that any future alternative will not be as beneficial as the existing relief, which is disappointing as the Chancellor noted that innovation and R&D are at the forefront of growing the British economy. Many UK companies are waiting to find out what will happen next and how this may impact them. Hopefully, the Treasury will set out a timeframe for consultation shortly.
“The good news from today’s announcement was that R&D Expenditure Credit will be increased from 10% to 11%, effective for spend incurred with effect from 1 April 2015. For companies claiming under the SME regime, the additional deduction has increased from 125% to 130%. While these may represent relatively small increases, they are welcomed.”