Feeds

UK hi-tech industry demands better R&D tax breaks

Hi ho, Hi ho, it's out of Britain we go

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

High-tech innovation in the UK is haemorrhaging offshore and only the Government offering improved tax breaks to support Britain as a research and development base can stem the tide.

This stark warning came from trade association Intellect which warned today in its Pre-Budget report that the nation will no longer be able produce the products and services it needs to compete in the global economy, unless the Government counters the growing threat from offshore competitors.

According to Tom Wills-Sandford, campaigns director, the breaks for undertaking R&D need to increase significantly. For large companies, he said, the effective tax break reward companies get for investing in R&D in the UK is between 3.75 per cent and 5 per cent of the actual cost.

"Government must understand that this figure is drastically below the 'noise level'. The implication of this is a massive drop in influence on R&D decision makers, who are firstly deciding whether to undertake R&D, and secondly where to do it. It is further drowned out by other uncertainties, such as the results of the R&D itself, exchange rates, and what the competition is doing."

Until the effective rate moves closer to the international average of 10 per cent, there will never be sufficient incentive for UK based technology companies to grow their share of global R&D, Wills-Sandford said. "In addition their ability to produce the innovative products and services that they need to compete in the global economy will diminish and the UK economy will suffer as a result."

Intellect also called on the Government to clarify the definition of R&D so that high tech project managers will know that an R&D project will qualify for tax incentives before the work is undertaken. In addition the trade association said it will badger the Treasury to ensure that 'engineering R&D' and 'software R&D' both unequivocally qualify for the Tax Credit. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.