Business Finance - Rebates boost R&D.
Tax refunds from the Treasury for research and development spends are enabling small technology companies to push ahead in spite of recessionary worries.
Tissuemed, a Leeds healthcare company, recently received one of the first tax refunds from the research & development tax credits, instigated by Gordon Brown in the 2000 Budget.
David Fortune, managing director, commented: ‘This is a major help in the business we are in as it is imperative that we invest in research and development to build a world-class company.’
Fortune said that at the time of the tax announcement last year he did not believe that the measure would amount to ‘rapid and significant’ help for Tissuemed. But he said: ‘For companies to receive large tax refunds of this nature, as a result of their R&D spend, will certainly help a number of companies to develop and will go towards improving our position internationally in hi-tech industries.’
The success of the R&D tax refund is good news for technology companies.
According to a recent Alliance & Leicester survey, one in three small business owners want to expand their businesses despite fears of an impending recession.
The survey revealed 51% of new businesses have the greatest levels of confidence and plan to expand in the next few months, despite the common assumption that in an economic downturn new or start-up businesses are the most vulnerable.
Only 3% of those surveyed anticipated the need to downsize in the coming months. Lynne Turner, head of Alliance & Leicester’s business banking, commented: ‘It is encouraging to see that many small businesses at the sharp end of the British economy are confident about their prospects this autumn.’
But not everyone is showing this level of optimism. According to Basda chief Dennis Keeling, quoted in last week’s Accountancy Age, software companies are cutting back on development spends to the detriment of their clients.
Software firms stifle development www.accountancyage.com/IT/1125358. ?: