The Chartered Institute of Taxation (CIoT) welcomed last week’s announcement that the Government would be conducting a review into Research & Development (R&D) tax credits.
But the organisation has said that it was vital that any changes to the framework for supporting innovation in the UK also benefited smaller businesses and start-ups.
The CIoT has made a number of recommendations including giving more responsibility for the arrangements to UK Research & Innovation, which is thought to inspire greater confidence among SMEs than HM Revenue & Customs (HMRC).
The institute is also pressing for the relief to be extended to product commercialisation by relaxing some of the restrictions currently attached.
David O’Keeffe, who chairs CIoT’s R&D Working Group, said: “The proposal in the Autumn Statement is that the Government will review the tax environment for R&D to look at ways to build on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place to do R&D.
“Clearly we don’t have the full detail yet – with details to be announced in the New Year – but the R&D expenditure credit is aimed primarily at larger businesses. I fear that the Chancellor risks missing a great opportunity to help smaller businesses and start-ups.”
The CIoT said it intended to participate fully in the upcoming review and would be making the case for “wide-reaching” changes.