Mark Tighe, CEO of the R&D tax specialist, Catax, said: “In terms of future-proofing the UK economy, this was an extremely encouraging Budget.
“The fact that the Chancellor focused on the need for innovation so early in his speech shows the structural importance of R&D to the modern UK economy.
“The increase in the Research and Development Expenditure Credit from 11% to 12% is a crucial step forward for UK research and development.
“With Brexit looming ever closer, the need for the UK to position itself as a major centre for global R&D has never been more important.
“An increase to 15% would have been a far more robust statement of intent, and many in the industry had quietly been hoping for it, but a rise to 12% should be applauded.
“While this rate increase is targeted at large companies, it is also available to SMEs that are in receipt of state aid for their R&D – through grants, for example. Unfortunately, this is an area of tax relief that is often overlooked and under-claimed.
“While the Chancellor has chosen the future, one element of his thinking about R&D remains stuck in the past: he once again made the same mistake of overly associating the research and development revolution with the most cutting-edge technologies, such as driverless cars, AI and 5G.
“Yes, these sectors symbolise the vanguard of innovation but we should not forget that many everyday businesses are also performing R&D day in, day out.
“The Government needs to drive greater awareness of what constitutes R&D in order that the many companies performing it unwittingly can take advantage of the lucrative tax reliefs available.
“The lack of knowledge surrounding what constitutes R&D is a fundamental problem as the money companies get back through R&D tax credits is generally reinvested in further R&D, which is a virtuous circle for any economy seeking to increase its productivity and compete on the international stage.”