image

News

R&D Tax Incentive Unchanged as Rishi Continues Innovation Push

Jenson Brook

700,000 jobs lost, £280 billion spent, an additional £127 billion planned to be spent on revival, the UK economy shrunk 10%, highest ever borrowing outside wartime… any one of these phrases would be a hard-hitting newspaper headline; the coronavirus pandemic has terrorised the world and now it’s time to recoup, rebuild and recover.

The 2021 Spring Budget was announced on Wednesday 3rd March 2021, a plan to recover from the largest deflation of the UK’s Gross Domestic Product (“GDP”) in modern history; a steep feat which lies on the shoulders of Rishi Sunak.

 

Forecasts

Office for Budget Responsibility (“OBR”) forecast the following:

  • – UK economy to return to its pre-COVID state by June 2022
  • – UK economy to be 3% smaller than originally predicted in 5 years’ time due to coronavirus

 

UK economy will grow by:

  •   – 4% in 2021/22
  •   – 7% in 2022/23
  •   – 7% in 2023/24
  •   – 6% in 2024/25
  •   – 7% in 2025/26

 

Unemployment rate would have peaked at 11.9%, however with the Chancellor’s recovery plan it should peak at 6.5% (1.8m fewer people out of work)

 

Announcements related to Innovation Funding

  • – No changes to the government’s Research and Development (R&D) investment, where they are still planning to have £22 billion per year by 2024 to 2025 to claim from various incentives
  • – A new consultation into the R&D tax relief incentive to attract more investment into science, research and technology
  • – Corporation Tax to increase from 19% to 25% in April 2023 for companies that generate over £250,000 in profits. For companies generating £50,000 or less in profits, they will remain at 19% Corporation Tax rate. Companies generating between £50,001-249,999 of profits, will be taxed at incremental rates from 19 to 25% Corporation Tax
  • – A new ‘super-deduction’ for business investment, with the ability to deduct 130% of the cost against tax on profits
  • – A new £40bn UK Infrastructure Bank based in Leeds, investing into green projects throughout the UK
  • – UK companies will be able to carry back losses (maximum of £2m) up to 3 years rather than the current 2 year carry back

 

Please see the full Budget report here.

 

If you have any questions on the above or would like clarification on any of the initiatives, schemes or amendments within the Spring Budget 2021, please contact Jenson Brook by email at jbrook@walmergroup.com.

R&D Tax Relief Budget Summary – November 2021

Last month, the budget saw several future changes for the current UK R&D tax relief schemes. Any company that is currently claiming or intending to claim should consider the upcoming changes as they could have a significant impact on whether you are eligible and/or the amounts you would receive.   Hosting and Cloud Computing The … …

Read More

29 November 2021

AI – What are we learning in 2021? Trend and Numbers.

The size of the artificial intelligence market in the UK is expected to grow at an annual growth rate of + 36% between 2019 and 2025 As it was certainly pushed by the limitations of a forced pandemic that accelerated digital transformation around the world. The CB insight Report “Artificial intelligence in number 2021” and … …

Read More

28 September 2021

12 May 2021

Are You Currently Raising Capital? Here’s How the R&D Tax Incentive Could Make Your Life Easier.

Whether you a first-time entrepreneur or a seasoned veteran, capital raising is one of the most difficult parts of starting and running your own business. It is estimated that over 90% of start-ups …

Read More

Get In Touch