R&D cut drives companies abroad.

Jeremy Hunt’s «disastrous» cuts to the government’s flagship investment scheme for innovation will result in Britain losing science and hi-tech jobs to overseas rivals, industry leaders have warned. The chancellor has been accused of using a «blunt instrument» to reduce the cost of research & development tax credits amid Treasury concerns about growing taxpayer losses to fraud and spurious claims. The multibillion-pound scheme provides tax incentives for companies to invest in innovation. It is considered a critical industrial policy as the government aims to «turn Britain into the world’s next Silicon Valley». In last week’s autumn statement, however, the chancellor made the incentives much less generous for small and medium-sized businesses.

The Treasury said the «generosity» of the scheme had made it a target for fraud and that the relief needed to be rebalanced towards larger businesses. However, the BioIndustry Association, which represents life science companies, warned that the move would result in promising innovations in areas ranging from vaccines to cancer treatments moving overseas. We’ve been warning HMRC and the government about the growing abuse of the scheme for five years,» he said. » He warned that the changes made «the UK a less attractive place to commercialise innovation.

« Headcount will move overseas as a result of this». » In the year to March 2020, £7.4 billion of support was claimed via 85,900 claims through the programme, an increase of 16 per cent from the previous year thanks to more lawsuits from small businesses. » «««« put the future of these innovative companies at risk». Rufus Meakin, an associate at MSC R&D, an advisory firm that helps companies to prepare complex R&D tax credit claims, described the move as an «exceptionally blunt instrument».

He said the measure hits «SME claimants across the board, irrespective of whether they are croissant bakers or companies breaking new ground in quantum computing».

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