TaxPersonal TaxTaxation – Business’ R&D long-term credit

Taxation - Business' R&D long-term credit

The chancellor's proposal for a new tax credit to help small businesses shoulder research & development costs will primarily benefit large corporations, tax experts warned.

The proposal for a new tax credit on a company’s R&D, to supplement the current tax relief, was clearly aimed at fostering long-term growth. But the immediate reaction from small business was a negative one.

Brendan Burns, national vice-chairman of the Federation of Small Businesses, argued that the measure failed to address the taxation needs of the expanding self-employed sector which does not pay corporation tax. ‘What is the government going to do about the self-employed? If it offsets the tax credit against corporate tax, it won’t help the self-employed one bit,’ he said.

David Harrison, national tax director for Kidsons Impey, said that, while an R&D tax credit for small companies would provide vital funding at an earlier stage, it would mainly benefit sprawling multinationals.

‘For the majority of SMEs outside the hi-tech sector with a turnover of less than #5m, R&D doesn’t come into it. It’s mainly larger companies like pharmaceuticals which have to undertake research to keep ahead of their competitors.’

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1w Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2w Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

2m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

4m Emma Smith, Managing Editor
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

3m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

3m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

3m Alia Shoaib, Reporter