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05/12/05 2005 pre-Budget proves that Government does take R&D seriously, says Intellect UK hi-tech companies welcome the Chancellor’s decision to improve the knowledge of tax inspectors
Intellect has welcomed the Chancellor’s 2005 Pre-Budget promise to create dedicated SME R&D units within HMRC, and to introduce training for tax inspectors to make sure that they understand software and engineering R&D procedures.
Over the past six months the trade association and its hi-tech members have called on the Chancellor to create better informed tax inspectors to deal with all claims, not just SMEs. This is because software development and engineering design projects have been hampered by tax inspectors who lack expertise. Intellect is disappointed that the Chancellor has decided not to create dedicated software and engineering units, however it does consider today’s pre-Budget to be an intelligent improvement of the scheme, and will now work closely with the Treasury to develop an effective software and engineering R&D education programme for tax inspectors.
Reacting to the pre-Budget report, Tom Wills-Sandford, Director of Policy at Intellect said:
“Today’s announcements prove that the Treasury is finally taking R&D seriously. However, dedicated SME units and increased training will not enable the UK to achieve its goal of increasing UK R&D spend by one third (to 2.5%) by 2014. To achieve that the Government must increase the effective tax credit rate for large companies so that the scheme acts as a real incentive for multi-nationals considering undertaking R&D in the UK.”
“It is vital that today’s announcements are seen as the first step. The Treasury must now maintain this pace of reform.”
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