George Osborne has just finished introducing the 2012 Budget, and some details are already available on the HM Treasury website.
The 2011 Budget already promised a raise of the tax credits “enhancement rate” to 225% from April this year (up from 200% last year, and 175% before that). This is coming in as promised, as are, as far as we know, the removals of the PAYE/NIC caps. Good news so far.
The new decision is something that’s come out of the Consultation process, which is the introduction of so-called “Above the line” R&D Tax Credits. The idea there is to make it easier to link up an R&D project to a tax credit, rather than having to go through the finance department (in large companies) and thus effectively make this a matter for the CFO rather than the CTO.
For small businesses, we hope that this change won’t make too much difference, though it is probably going to make things more complicated. This is unfortunately an inevitable consequence of the government doing, well, almost anything.
How this is implemented remains to be seen. There will be consultations over the next year, devising ways to implement this, which we will try to get entrepreneurs involved in, as we’ve done for Patent Box.
If you are curious about R&D Tax Credits, Innovation Grants and Open CultureGET IN TOUCH
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