Off the back of a few traumatic months for Theresa May and her cabinet, a great deal of importance was placed on the annual autumn budget. Despite the housing situation and the health of the NHS stealing all the headlines, business owners and financial experts cast a watchful eye on the role research and development played in this budget. Research and development had previously sailed under the radar in the midst of Brexit talks and financial struggles, but on the eve of progression and recovery, what does this latest budget mean for research and development? Will it be kept to one side again as the government focuses on the more pressing issues? Or will May turn to R&D to help solve all of her problems? In their latest blog post, randd uk outline what the November budget means for research and development.
When Philip Hammond presented the infamous red briefcase to the baying mob outside Number 10, business owners all over the country pricked up their ears to hear what the chancellor had to say about R&D. For the most part, the news made for easy listening. With Hammond promising long term support for science and innovation, as well as setting aside billions of pounds to fund research and development projects, business owners breathed a collective sigh of relief.
Overall, the news of support to R&D was encouraging, but the specific details of these plans drew the biggest smiles. By setting aside £2.3 Billion for investment into research and development, Hammond announced the largest boost to the sector for 40 years. The numbers all look very good, but where will this cash flow to?
A large proportion of this money will go towards increasing the rate of research and development expenditure credit from 11 percent to 12 percent, in an attempt to provide businesses with the confidence to invest into R&D. The November budget also saw another £170 million set aside for innovation to transform productivity in the construction sector. As previously mentioned, the housing situation has captured the majority of the headlines in the buildup to this budget, with house prices steadily increasing, making the prospect of purchasing a house even more difficult for first timer buyers. To aid the construction of 300,000 homes each year, the government is offering cash incentives for talented young people to choose a career in construction and to contribute to solving the housing crisis. We asked the question “Will May turn to R&D to help solve all of her problems?”, and, off the back of this proposal, the answer is yes. Many have recognised the housing situation as one of the biggest problems facing the country, and by pumping billions of pounds into the R&D sector, it appears that Theresa May sees the use of research and development as an efficient and sustainable way of solving the problem.
Stepping away from the more industrious side of the November budget, creative and digital industries are also being given a helping hand. May’s government has outlined plans to develop immersive technology for creative content by launching a new AI and machine learning programme targeted at the services sector. Echoing our previous point, the importance of research and development in the November budget has increased significantly in comparison to earlier budgets, highlighting the importance that is being placed on science, technology, and innovation.
Having dissected all the numbers and having broken down all the plans and proposals, we must now try and understand what it all means for research and development as a whole.
It is clear to see that the November budget has focused heavily on research and development, which means that the government has stuck to its promise by cementing its commitment to research and development. Despite being faced by a housing situation that needs attention and a National Health Service that is in need of rejuvanence, Theresa May is sticking most of her eggs in the basket of R&D in the hope that it will provide long term stability. By placing research and development at the centre of the housing crisis, potentially the biggest domestic issue facing the country, it shows just how vital the R&D sector is to May’s plans. Despite the November budget marking 10 years since the notorious ‘Credit Crunch’, the country is now in a position where it can begin to squeeze the accelerator down on recovery and progression, and the most refreshing aspect of the whole situation is that research and development is the foot on the pedal.
Not only has the November budget provided businesses of all shapes and sizes a welcome boost, randd uk are also on hand to help. For help with your research and development tax credits application, contact randd uk today by calling us on 01332 477 070 today and speak to a member of our team.