Ambitious new plans for UK innovation and R&D tax reliefs
On the 1st of July 2020, the UK government published a formidable new roadmap, outlining its new plans for R&D in a post-COVID-19 world. Where the virus has devastated everyday connections between humans the world over, the government’s new roadmap is refreshingly people-focused, placing an emphasis on fostering collaboration and nurturing inclusivity through employment opportunities for those currently underrepresented in R&D careers. With the new roadmap, the government seeks to ‘unlock and embrace talent, diversity, resilience and adaptability’. Putting people at the core of its long-term plans to incentivize diverse talent from across the world, the government says: ‘come to the UK and be part of this exciting new future.’
What support is being put in place?
There are new and substantial funding models being developed to support the change. The new plans for R&D also allude to ‘reducing bureaucracy’ through ‘innovative new funding mechanisms’, as well as continuing the promise of an £800 million ARPA-style funding body to support breakthrough technologies and research using new funding models. We know that this £800 million represents a relatively small proportion of the overall public spending on R&D (the business community invested £25 billion in 2018 which represented over two-thirds of all R&D funding). Still, we hope this pledge will provide critical and efficient support to R&D efforts across the country.
What this means for our clients
We see R&D Tax Credits as vital government growth fuel that all innovative UK companies should know about. So, perhaps most important for our clients is the government’s commitment to making the current modes of tax relief reflect the changing shape and nature of R&D in the UK. This is to ensure the UK remains ‘globally competitive’ by engaging ‘Devolved Administrations’ which align funding with the interests of all four nations. In addition to the government’s 2020 Budget which increased (again) the RDEC rate for large companies, there comes a candid commitment to improving access to finance for small and start-up companies. The government is clear about prioritizing high-impact firms that bring vital innovation to the market. At Kene Partners, we couldn’t agree more: whatever your size or sector, your investment in innovation should be rewarded.
We wholeheartedly support the government’s renewed commitment to breaking down barriers to innovation – be that for the underrepresented individual in their career, or the company taking a risk. And we will continue to use the R&D incentives to help strengthen the UK’s global position in research and innovation in this bold wave of ambitious new plans for R&D. The world beyond this pandemic will be – the government says – a ‘once-in-a-generation opportunity’ to improve, fortify, and reinvigorate innovation in the UK.