Philip Hammond made it abundantly clear in his Budget that innovation and creativity are the driving forces behind the UK’s economy.
The Chancellor spoke of the need to embrace the changes, challenges, and opportunities that lie in wait for businesses in the UK.
He also talked about a technological revolution that will shape the way we all live and work for generations to come.
The reality is that anyone involved in business already understands how vital it has become to embrace change and the importance of constantly looking at improving the way you do things.
Here at GovGrant, we are delighted that Mr Hammond has once again taken steps to support and recognise the efforts of companies that are investing in research and development.
There was plenty of good news in the Budget when it comes to increasing support for innovation in business and the extra £2.3 billion represents the largest increase in R&D funding for the last 40 years.
It was also reassuring to see that the Government is fully committed to the R&D Tax Credit scheme, which has helped thousands of small and medium sized enterprises (SMEs) across the country gain access to vital funding.
During his speech, Mr Hammond focussed on businesses that are involved in cutting edge technology such as digital communications, A.I., and scientific research.
But it should not be forgotten that innovative ideas and practices are being used every day in offices, workshops and firms the length and breadth of the country.
There have been some suggestions, most notably in a recent report from the IPPR think tank, that tax relief is not the most efficient way to reward innovation.
However, our experience at GovGrant has taught us the exact opposite and that the R&D scheme and Patent Box offer the most straightforward and direct route to funding for SMEs.
The Government and the Chancellor have made it clear that they are serious about investing in innovative businesses. And they should be applauded for taking that stance.
But it is vital that the efforts of forward thinking SMEs continue to be recognised through the tax credit scheme. And it is also worth pointing out that 90 percent of SMEs eligible for tax relief have still not applied even though the average successful claim is £61,000.
That means that the focus should now be firmly placed on helping businesses of every type and from every sector know how the R&D scheme works and how they can claim the extra funding that is available to them.
Understanding what qualifies as expenditure on R&D and raising the knowledge for businesses is a must – the money is there and businesses need to know how to access it.
