? leaving the rest of the UK to share the remainder. The UK’s exit from the EU could bring a “loosening of the shackles” which bind us when it comes to R&D tax relief. The state aid Britain?provide to its business community is, in part, subject to EU legislation, meaning decisions for UK businesses are based on European rules. But a consequence of Brexit will be that the UK could attain the ability and power to make its own decisions on such matters, including what guidelines constitute a business being placed in the large company scheme or the small company scheme. It is accepted that implementing HMRC’s R&D scheme does not signify a cost to the UK economy. Instead the scheme can be viewed as an investment vehicle, which ends up stimulating between £2 and £12 in primary, secondary and tertiary taxes from areas such as VAT, corporation tax and payroll taxes. So it stands to reason that R&D tax relief can be linked to the UK’s GDP. The impact of Brexit will mean that investment in R&D activity will likely increase, especially with the ability to control our own tax relief schemes. This will help stimulate increased investment, which will aid us in obtaining a higher GDP. With this capacity to stimulate investment post-Brexit, an increase in R&D activity will likely lead to anincrease in uptake of the scheme. This could pose a risk with the R&D tax relief market becoming overheated with too many claimants. A balance would need to be struck by having a matched regulatory framework implemented, as well as the need to have increased scrutiny by HMRC. Enhanced regulatory measures is also something that should be welcomed. There is no doubt British companies which have been involved in R&D and those which turn out to be hugely successful are linked. However, there are those who do not recognise that even improving a product for market by making it faster or more efficient is R&D. Whilst one might not typically expect a software engineer to sit in a laboratory, alongside the pharmaceutical/biotech sector, the software and IT industry is one of the sectors which is leading the way in R&D. Alongside these established players in R&D are, of course, new, emerging players. Technology is evolving at an incredible rate, increasing the likelihood of business ideas being realised. With the UK’s accessibility and connections to the EU set to change, Bosses must realise that continual R&D and innovation is essential to ensure they can remain competitive in this new European landscape. Brian Williamsonis managing director at Jumpstart. Image: Shutterstock Today’s SMEs are waiting too long to reap the financial rewards of Research & Development (R&D) tax credits, according to Friend Partnership. The chartered accountancy firm believes many bosses could be securing repayments from as early as ten days from the submission of their claim.
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