With a new government often comes policy change, including to existing schemes – so you’re right to wonder if the R&D tax credit scheme will be affected. Here, our expert R&D tax credit specialists round up exactly what the new Labour government currently means for the R&D scheme.
Stability in R&D tax credits
The good news is that Labour has promised to keep R&D tax credits stable. This means you can continue to rely on these credits to support your innovation efforts. This commitment to stability is welcome news for many businesses, particularly after concerns that the previous Labour shadow government led by Jeremy Corbyn planned to scrap R&D tax credits.
In their official statement on backing British business, Labour explicitly states their commitment to ‘Stable R&D tax credits, 10-year R&D budgets and a new Regulatory Innovation Office.’
Sector-specific evaluations
In the same statement, Labour revealed that they plan to look at how R&D tax credits work in different industries, starting with Life Sciences in order to ‘maximise Britain’s strengths in life sciences’. This could mean some sectors might get better rates in the future. They also plan to set out ten year plans for certain high growth sectors including:
- Aerospace Industry
- Artificial Intelligence
- Automotive Industry
- Defence
- Life Sciences
If you’re in one of these sectors, this is definitely something to watch out for. As trusted accountants in Manchester and Liverpool operated in the R&D tax credit sector, we’ll be following these developments closely.
The new government wants to give ten-year budgets to key research organisations in areas like AI, energy, and defence. While this doesn’t directly change tax credits, it could create a more stable environment for R&D overall.
Support for university spinouts
If your business works closely with universities, you might benefit from Labour’s plans to make it easier for university spinouts to get funding. This could lead to more partnerships between businesses and academia.
Regional growth focus
Labour has indicated support for R&D projects in various parts of the UK, including funding for research centres outside of traditional hubs. This could potentially lead to more geographically diverse R&D investment, but the extent of this .distribution remains to be seen.
What does this mean for your business?
While the R&D tax credit scheme looks set to remain stable, there may be new opportunities on the horizon – especially if you’re in a targeted sector. Don’t miss out on any potential windfalls if you stand to benefit. Choose an R&D tax advisor that helps you make the most of them, like the team at Williamson & Croft.
Need to speak to a specialist about your entitlement to R&D tax credits? Our team of tax specialists at Williamson & Croft will be happy to assist. Get in touch today.