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30/11/05
Industry Expects Pre-Budget to Deliver on R&D UK hi-tech companies anticipate that the Chancellor will announce plans to improve HMRC Tax inspectors’ understanding of software R&D
Intellect, the trade association for the UK hi-tech industry, has today said that it anticipates that there will be measures in the Chancellor’s Pre-Budget Report, on December 5th, to enhance the HM Revenue and Customs’ (HMRC) understanding of the Software R&D process. This will improve the research and development (R&D) tax credit scheme for UK hi-tech firms, making it easier for firms involved in software R&D to claim the tax credit and making the UK a more attractive place to invest.
Over the past six months the trade association has worked hard to convince the Treasury that the R&D tax credit rules, and the way they have been applied by HM Revenue and Customs (HMRC), have introduced significant distortions to the Software R&D industry. This is because HMRC Tax Inspectors do not have a sufficient level of understanding of software R&D or a knowledge of how the industry works, and Intellect believes that this has resulted in many valid claims being turned down.
This hard work has now paid off and Intellect feels confident that the Pre Budget Report will include plans to introduce a scheme to improve the knowledge and understanding of software R&D amongst HMRC Tax Inspectors.
Commenting, Tom Wills-Sandford, Director of Public Affairs at Intellect:
"Hi-tech firms have always found it harder to obtain the R&D tax credit for software R&D than for other areas of development. The primary reason for this is that HMRC Tax Inspectors have not been familiar enough with software R&D. The impact of this has been felt keenly within the UK hi-tech industry, and the failure by HMRC to provide consistency, certainty and simplicity to the issue of software R&D has resulted in doubt and uncertainty within the hi-tech industry."
"We feel confident however that HMT understands and appreciates this situation and the impact it has had on our industry. We look forward to the Chancellor’s Pre-Budget Report and, we anticipate, to working with HMT and HMRC in the coming months to address this issue." Press contact: Press Office T 020 7331 2168 E This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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