TECHNOLOGY, manufacturing and media businesses were given a lift yesterday by the promise of tax breaks on firms’ investments.
George Osborne extended the government’s tax credit for large businesses that invest in research and development (R&D), saying that encouraging companies to invest in research in the UK is “absolutely central to Britain’s economic future”.
The credit will up corporation tax relief from 9.1 per cent of R&D spending to 10 per cent. Small and medium sized businesses currently have a 225 per cent credit.
More incentives to Britain’s creative industries – meaning high-end TV, film and video games – were also proposed yesterday, in addition to the 25 per cent tax credit proposed in December’s Autumn Statement. The government said it would match voluntary donations to the Skills Investment Fund, which aims to foster talent in the film industry, and said it would launch a consultation on more tax breaks for visual effects firms.
“Today’s package recognises the significant economic contribution made by our highly skilled creative content industries,” creative industries minister Ed Vaizey said.
The tax reliefs for the creative industries, intended to encourage more hits such as Downton Abbey, will come in at the start of April.
PwC's head of patents and R&D, Diarmuid MacDougall, welcomed the tax credit for research. “It will make the cost of doing R&D in the UK lower, thereby making our R&D centres more globally competitive, which in turn should help us attract and secure vital skills,” he said, adding that “businesses that may now be able to pursue projects that would otherwise have been abandoned”.