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Tax credits to encourage small businesses to invest more in research and development will increase by £80 million a year from today (1 August), the Treasury has announced.
This will bring the total tax relief available to around £300 million a year, in the hope of encouraging more of the UK's innovative SMEs to invest in developing new and improved products.
To enable companies to claim the additional tax relief, the rate available for qualifying firms investing in R&D will increase from 150% to 175% of their investment.
Also, the maximum size of company that can qualify for tax relief will to 500 employees, with the associated limits on balance sheet value and turnover also increasing by 100%.
The Treasury said it hoped its new move will build on more than £1 billion-worth of support already provided. The department believes the increase in the size at which a company can claim relief will be a huge boost for small R&D-intensive businesses that will be the large innovative companies of the future.
