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The Chancellor’s reforms to Research and Development (R&D) tax reliefs take effect today, including an increase in the Research and Development Expenditure Credit (RDEC) rate from 13% to 20% for UK businesses.
However, new research has found that half of UK SMEs have had to borrow or raise any money due to the current energy and inflationary crisis and nearly a quarter have delayed planned investment in new technology or infrastructure due to rising costs.
Chirag Shah, CEO and Founder of Nucleus Commercial Finance, comments: “Against a backdrop of stagnant productivity and absent growth, business investment is in the doldrums. The promise of 12 new UK investment zones in a bid to reignite local economies, create new jobs, and boost investment opportunities could prove to be incredibly impactful. But in the shorter term, the government is pinning much of its hope on the Research and Development tax credit changes. And while those larger businesses working on innovative projects in science and technology will receive a boost to their growth ambitions, the reality is that SMEs up and down will likely see little benefit.
“To put it simply – more must be done. To stay competitive in the global market, attract foreign investors, and power up the UK economy, Britain’s SMEs need to be able to enhance their offering. The UK’s business finance network has the opportunity to step up and lead. Lenders must continue to work with and support the SME sector with fast and reliable access to the funding needed not just to sustain, but to drive forward, to innovate, and to grow.”