Experts at accountants PwC are urging West firms that invest in research and development (R&D) to take part in a Government consultation and help shape the future of support for industry.
The Government is changing the way businesses can access its £700m pot of R&D credits through a new scheme, due to become legislation from April 2013.
PwC estimates more than 2,000 large firms apply for the credits each year, but these are almost always handled by their tax teams rather than staff in R&D.
PwC West & Wales tax business unit leader and partner Tracey Bentham said: “R&D is a lifeline for this country. Currently the R&D credits are dealt with by the tax function of a large company, often not affecting the R&D teams. Change is afoot however; to help the R&D leaders apply for and secure the cash directly so they can spend it on developing the products.”
The consultation is aimed directly at large UK firms (500-plus employees) who spend around £10bn on R&D each year. Change to the new credit scheme could encourage businesses to spend an extra £700m in R&D which PwC estimates could create up to 30,000 jobs.
From April 2013, this amount will be given as a credit directly against the cost of R&D, like a grant, regardless of whether the firm pays corporation tax or not. The credit will still be payable if the company has tax losses.
PwC West & Wales director Tony Connelly added: “This is no longer a tax issue. It is about allowing British manufacturers to literally take the credit for the work they are doing.”
He urged all R&D and product development leaders from the region’s automotive, aerospace and defence, manufacturing, chemicals, life sciences, technology, pharmaceuticals, biotechnology and electronics to feed in now to the consultation.
Companies have until June 29 to take part in the consultation at http://www.hm-treasury.gov.uk/consult_above_line_credit_rd.htm
