Member Article

Mitchell Charlesworth Budget Comments

Phil Hartley, tax director at Mitchell Charlesworth comments:

R&D tax relief The Chancellor announced that the government’s target of hitting £22bn in research and development (R&D) investment would be pushed back to 2027, two years later than had been planned initially, which isn’t great for growth or attracting investment into the UK and likely to be as a result of the pandemic. However, spending on R&D will be £20bn a year by the end of this parliament.

R&D tax relief rules will be expanded to include cloud computing and data which should modernise R&D tax relief for up to date spending patterns.

He is also making changes to R&D tax relief to refocus the relief on innovation that is occurring in the UK from April 2023. Making it more targeted in this way will have an impact on bigger companies rather than SMEs and could entice international businesses to undertake R&D activity in the UK to benefit from the tax relief.

Business rates The Chancellor announced a temporary, one year 50% business rates discount for companies in retail, hospitality and leisure sectors, up to a maximum of £110,000, which provides relief for sectors that have been hit particularly hard by the pandemic restrictions over the last 19 months.

Business rates will also be reformed to support companies, including a new relief to support green technologies and a new 12-month relief for companies to invest in their premises and make property improvements from 2023.

Additionally, next year’s planned increase in the business rates multiplier will be cancelled.

Whilst the discount is good news for retail, hospitality and leisure sectors in the short term, there is room for improvement and the government could go further with this in the future.

This was posted in Bdaily's Members' News section by Anne Griffiths .