R&D tax credits are to play a central role in The Confederation of British Industry’s long-term initiative to reinvigorate UK economic growth.
Katja Hall, the senior director of the CBI has said that the UK is falling behind its competitors and needs a kick start to see it raise itself above them: ‘The scale of the challenge is sizeable - our competitors are powering ahead, with France outstripping our research & development (R&D) investment by 40%. At the same time, only 3% of our graduates end up in engineering or technology jobs.’
In the report, called ‘Pulling Together,’ CBI argues that the key to increasing the economy is developing domestic supply chains, making the UK the destination of choice for high-end manufacture.
For this to be possible innovative business within the UK need to be encouraged. Not only are they recommending the widening of R&D tax credits, to support the later stages of taking an innovative product to market – commercialising and manufacture for example – they are also calling for an increase in private and public sector spending on R&D by 3% of GPD, and a doubling of spending on the UK’s innovation agency, Innovate UK
The strategy is expected to create 500,000 more jobs – a strong UK-based supply chain requires more skilled workers, which means encouraging more students to choose STEM subjects: science, technology, engineering and mathematics.
They also wish to encourage more women into male dominated sectors such as engineering, while at the same time reforming the immigration system to attract skilled workers from abroad.
This is a long term strategy and possibly a quick and easy fix to the UK economic concerns. The initiative is of course reliant on government backing and as yet Vince Cable has not clearly expressed his support. However with concerns about the government’s financial strategy already being held by UK businesses it would be foolish to ignore fresh ideas.
With a further shake up of the R&D tax credits on the horizon, which promises to enable more companies to qualify for tax relief as well as other forms encouragement and support, things are looking positive for UK SME’s, which are again being recognised as key to the UK economy’s redemption. Contact us at RIFT Research and Development to see if your SME’s innovation is eligible.
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