“Get the economy firing on all cylinders,” is the message Prime Minister, Theresa May, has given after announcing a further £20bn investment for businesses engaged into innovative activities.
It means that businesses across the UK can expect to utilise the R&D Tax Credit scheme for the foreseeable future with the fund now lasting until the end of 2027. It is a move that will reassure British businesses to continue on the trajectory to hire high skilled roles as well as provide a large incentive for international firms to set up business in the UK.
Mrs May says it is “an historic opportunity to signal an important, determined change.”
Why has this happened?
Incredibly, despite the scheme having existed since 2000, it has still not fully arrested the decline in innovation in the UK against other developed nations, placing tertiary services ahead of technology advances. Indeed, the scheme is seen as a way not only to support development for existing businesses but to incentivise international companies to set up their “R&D centres” in the UK – a strategy which Spotify announced just last week.
Jason Richman, VP Product at Spotify commented: “London has made the decision of where to grow our next R&D hub an extremely easy one. It has a vibrant start-up community, and a wealth of great tech talent, making it the perfect location in which to build out our talented R&D team. London will be one of our major hubs where we’ll house key investment areas including expansion of our subscription-commerce capabilities.”
The role of Leyton UK
The announcement has brought into sharp focus the importance of the work that Leyton UK provide across Britain – not just for the direct beneficiaries and its client base– but also for the country as a whole.
Simba M., R&D Tax Manager at Leyton says: “the announcement vindicates its position to claim tax credits and see them returned to companies that are engaged in these types of activities.” He added: “Leyton has tremendous experience in scoping projects and making these claims to HMRC. With Brexit now on the horizon it seems the Prime Minister has focused all efforts on attracting businesses with this lucrative tax credit.”
To this day, many businesses which are eligible do not claim the credit, a detriment not only to themselves but to the economy as a whole. The Prime Minister says: “It is not about propping up failing industries or picking winners, but creating the conditions where winners can emerge and grow.”
The firm, which also specialises in grant applications, patent box and employment law, has grown over the past eight years to over 160 employees with two offices in London and Glasgow. It makes one out of every ten R&D Tax Credit claims in the UK.
Tom Nicolson, Senior R&D Tax Specialist