Rewarding Innovation as post-Brexit Britain Competes Globally
Just weeks ago Prime Minister Theresa May triggered Article 50 to initiate the negotiations that will prelude the United Kingdom leaving the European Union.
In taking this new direction, the country will face fresh challenges. Stimulating innovation, strengthening employment and catalysing growth, through investment in R&D, will be central to a successful Brexit strategy.
Chancellor Philip Hammond’s spring budget showed that the Government seeks to continue to reward innovation, in building a more globally competitive economy, through its generous R&D tax relief initiative. Hammond announced a bumper £2 billion a year increase in November for research and development funding.
Indeed, this reflects a longstanding strategic policy since the referendum. In a speech delivered in mid-November, Prime Minister Theresa May explained that post-Brexit she would like to make the UK the “global go-to place for scientists, innovators and tech investors” – a pledge that she hopes will position Britain as an influential international player.
May described her aim “not simply for the UK to have the lowest corporate tax rate in the G20, but also one that is profoundly pro-innovation”.
As it currently stands, the initiative is really working to that end.
According to Government research, for each £1 spent on R&D Tax Credits between £1.53 and £2.35 of additional investment in the UK was stimulated.
The latest HMRC statistics which were published a few months ago also showed an increase in Northern Ireland businesses engaging with the R&D Tax Credit scheme. A total of 610 businesses here took advantage which equated to £25 million of money being poured back into companies for growth and further innovation. There were 190 more businesses successfully submitting R&D claims in 2015 than in 2014.
Post-Brexit period is the perfect time for innovative and developing companies to apply for R&D tax credits.
SMEs in Northern Ireland accounted for 79 per cent of the successful claims submitted from Northern Ireland, but, overall Northern Ireland still lag behind the rest of its UK counterparts.
Regional trends show that, although the majority of R&D Tax Credit applications are concentrated in the south-east of England and London, Northern Ireland still lags behind our UK counterparts.
It’s time now to take notice of this lucrative initiative. When companies dismiss the notion that they are undertaking research and development they potentially throw away hundreds of thousands of pounds.
This is one reason why we are falling behind the other UK regions. R&D tax relief is not just for the ‘white coats’. We need to get that notion out of our heads.
You can be creating a new process, product or indeed service. You can be making improvements to an existing service or using science and technology to duplicate existing processes, products or services.
Northern Ireland has the potential to be the “global go-to place for scientists, innovators and tech investors”. There are so many businesses doing great things. But, credit where credit is due.
Get your share of Mr Hammond’s pot of gold. After all, it’s there for the taking.
Tom Verner is Managing Director of Momentum NI, a market-leading team of R&D Tax Credit specialists incorporating R&D technical analysts, chartered accountants and specialist business consultants.
Featured image credit: Photo via Boegh (CC BY-SA 2.0 Licence)