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10/12/03
Government’s drive to incentivise R&D is positive, but we’re still below the noise level, says Intellect
Intellect, the hi-tech industries trade association, has welcomed the series of R&D tax credit announcements made today in the Pre-Budget report. However, it expresses disappointment that the effective tax credit rate is still below what it calls the ‘noise level’ of real incentive.
The trade association argues that an increase from 4% to approx. 4.5% is simply not aggressive enough and will fail to provide British companies and multi nationals with the incentives they need to invest in the UK as an R&D base.
Tom Wills-Sandford, Intellect Campaigns Director said, "The widening of allowable costs for R&D, and the apparently clearer definition of R&D (both measures Intellect has consistently campaigned for), will hopefully bring greater levels of certainty to R&D decision makers. However, even with a widening of the range of allowable costs, the UK tax credits scheme still fails to pass the ‘noise level’ test."
"We are disappointed that the Chancellor has failed to prioritise the requirement for real incentives for R&D decision makers, and are concerned that this points to a lack of commitment from Government to achieve its goal of having the best incentive system for R&D in the world."
"If British hi-tech businesses are to be best placed to develop and produce the innovative products and services they need to compete in the global economy then R&D tax credits must move closer to the industry’s goal of an effective rate of 10%."
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