Small companies spent £24.3bn on analysis and improvement (R&D) in 2021 – 4 per cent greater than they spent on R&D in 2020, in response to newest Workplace for Nationwide Statistics figures.
Companies with as much as 249 staff spent almost £1bn extra on analysis and improvement final yr than the £23.3bn they spent in 2020 and £4.3bn greater than they spent in 2018 – calling into query the Authorities’s choice within the Autumn Assertion to chop the R&D tax credit score for SMEs in favour of concentrating it within the palms of bigger companies.
By comparability, bigger companies solely spent £24.3bn on analysis and improvement final yr.
>See additionally: Autumn Assertion what it means for small enterprise
The Federation of Small Companies has accused Chancellor Jeremy Hunt of “financial vandalism” over his choice to chop funding incentives for small and medium-sized companies.
The FSB instructed The Occasions that the Chancellor had made an “unprovoked assault” on SMEs by reforming R&D tax credit final week.
The scheme has been tilted in the direction of bigger firms after the Treasury determined that analysis and improvement tax credit for small companies have been too typically used for fraudulent and spurious claims.
>See additionally: Sunak eyes reining in small enterprise R&D tax credit
The price of the R&D tax credit score has been almost halved following the Autumn Assertion. Mr Hunt reduce the deduction charge for the SME scheme to 86 per cent and the credit score charge to 10 per cent.
Tina McKenzie, coverage and advocacy chairwoman on the FSB, instructed the newspaper: ““This could have been a second of triumph for the small enterprise neighborhood and the UK economic system, however the Chancellor has turned triumph to catastrophe, with the self-inflicted R&D credit score crunch set to chop a swathe by means of start-ups, [university] spin-out and superior engineering firms. Driving small R&D companies out of enterprise is financial vandalism.”
Total expenditure on analysis and improvement carried out by UK companies (in present costs) was £46.9bn in 2021, a rise of £2.9bn since 2020 and £5.9bn since 2018.
Additional studying
How companies can maximise their R&D tax credit score advantages
