The Chancellor has responded to industry calls to reform the R&D tax credit system, announcing the change to an ‘above the line’ credit in today’s Autumn Statement.
The reform will signal the UK’s international competitiveness, generate more investment in UK R&D, safeguard jobs and affirm the country’s status as a prime location to base high-skill operations, according to the SMMT.
“Reform of the R&D tax credit system propels the UK into a new league of global competitiveness sending a strong signal to international investors,” said Paul Everitt, SMMT Chief Executive.
“The UK is already a centre for innovation with advanced engineering and low carbon expertise attracting major corporations to invest in the UK; this reform will enhance the UK’s investment appeal, create high value jobs and drive economic growth.”
UK-based automotive companies already invest more than £1.5bn each year in R&D. This, coupled with a world-class skills base, has made the UK a leader in the development of low and ultra-low carbon technologies.
Moving to an ‘above the line’ system will strengthen the link between R&D investment decisions and the credit, enhancing the UK’s international competitiveness and attracting a greater share of global investment.
The Chancellor also:
• Cut January’s planned 3p rise in fuel duty, providing welcome relief to motorists.
• Re-affirmed his commitment to boosting skills, particularly those leading to engineering and science degrees.
• Introduced a national loan guarantee scheme of up to £20bn to help small businesses to invest in growth.
• Announced a £1bn Business Finance Partnership fund to assist mid-sized companies to find affordable finance through non-bank channels.
Alongside the Autumn Statement, government also published its Logistics Growth Review that sets out plans to improve efficiencies, remove barriers, develop skills and encourage growth in the logistics sector.
The SMMT is part of a task force that will spearhead the development of the sector, liaising with government, local authorities and industry to implement measures that support the use of low emission technologies.