Evaluation of Research and Development Tax Credit
This report summarises the take-up and use of Research and Development tax credits, and assesses their impact on R&D investment in the UK.
Documents
Details
Research and Development (R&D) tax credit is a tax relief designed to encourage greater R&D spending. Investment in R&D can increase productivity and so is important for the long-term growth of economies.
From the launch of the scheme in financial year 2000 to 2001 until the end of 2012 to 2013, more than 拢9.5 billion had been claimed in tax relief and payable credits. Over 28,500 companies had claimed under the Small and Medium-sized enterprise (SME) scheme and more than 7,000 under the large company scheme; altogether making more than 100,000 claims for periods up to and including financial year 2012 to 2013.
This evaluation estimates that for every pound spent on R&D tax credits, between 拢1.53 and 拢2.35 is additionally spent on R&D by UK companies. The results are in line with previous international studies, which have found tax credits stimulate from around 0.3 to around 3 times their value in R&D investment.