R&D reforms could undermine UK's mission to be a science and technology superpower

Upcoming changes to research and development (R&D) tax incentives could lead to 50% of UK science and technology businesses moving some of their R&D activity abroad according to research from ForrestBrown.

Among the legislative changes due to come into force from 1 April is a refocusing of R&D tax incentives towards innovation carried out in the UK by excluding relief for subcontracted work and the cost of externally provided workers when it is carried out overseas.

On average science and technology businesses surveyed by ForrestBrown invest nearly £1.1m in R&D activity a year. The Office for National Statistics estimates that expenditure on R&D performed by UK businesses in 2021 was £46.9bn. The firm’s research implies this figure could be severely diminished as a result of the impending legislation. It suggests that a de minimis threshold would ‘ease the administrative burden on companies affected when...