Government says new tax credits will help small businesses

Date: 1st August 2008

The government has confirmed that it believes its increases in the R&D tax credits system will genuinely help small businesses and sole traders.

Ahead of increasing the eligibility of the tax credit scheme today (August 1st), the government stressed that the new rules would save small businesses money and encourage them to develop new and innovative technologies.

Treasury minister Angela Eagle said that the more generous system would bring the total tax relief available through the R&D tax credits to around £300 million a year.

"The R&D tax credit schemes are the government's most important policy in support of R&D investment by companies in the UK.

"By increasing the value of the SME scheme by a third, we are showing our continued commitment to helping innovative UK companies invest to grow.

"[The] announcement will build on more than £1 billion worth of support already provided."

When the EU recently approved the changes to the R&D tax credit scheme, David Cobb, global head of R&D tax at Deloitte, said that the new system was welcome but added that it had "taken longer than expected to reach this point".