EEF calls for enhanced R&D tax credits
1 min read
The EEF has urged the government to provide cash handouts to meet research and development costs which they say could boost job creation and increase economic output by £665 million.
Ministers must "create a truly internationally competitive R&D tax credit regime" a report on driving economic growth through internationally competitive R&D tax relief commissioned by SMMT and EEF and prepared by PwC, claimed.
The report called for strengthening the link between the credit and R&D investment decisions, removing the link with corporation tax in favour of an 'above the line' credit.
The change, they say, would incentivise major private sector and foreign investment in UK manufacturing, create high-value jobs, support government's move to rebalance the economy, enhance the UK's global competitiveness and drive economic growth.
EEF and SMMT are urging government to introduce a cash benefit or redeemable credit at the point R&D costs arise, rather than providing a relatively opaque offset against corporation tax payments.
The report estimates that the change could increase R&D investment in the UK by nearly £390 million per year and increase economic output by £665 million in the short-term, outstripping the £205 million net cost to the Exchequer by a factor of three.
EEF chief executive Terry Scuoler (pictured) said that encouraging high value investment and innovation by UK-based companies as well as attracting foreign investment was crucial for ensuring UK manufacturing and the wider economy could continue to grow
SMMT chief executive Paul Everitt said the automotive sector was Europe's largest investor in R&D and the changes proposed would encourage companies to invest even more.
