Small firms take up R&D tax credits
The Government used the Treasury's recent Question session in the House of Commons to refute suggestions that small firms were missing out on R&D tax credits.
As reported in UKTECH, the R&D tax scheme for small businesses was recently described as a 'shambles', as small firms lost out because of tax inspectors with little scientific knowledge and long delays.
However, during the recent Treasury Questions, Labour supporters asked questions which allowed the Ministers to counter the criticism.
Dr. Ashok Kumar (Labour MP for Middlesbrough, South and East Cleveland) (Lab) opened the batting by asking what steps are being taken to encourage industry to increase support for research and development.
As part of his reply, the Financial Secretary to the Treasury, John Healey, claimed that statistics published that day confirmed that the value of the small firms tax credit last year was £259 million. Overall, the total cost of support claimed under the tax credits is an estimated £1.3 billion.
Dr Kumar then asked Mr Healy what effort is being made to promote the tax credits to small and medium-sized industrial businesses, because we must ensure that they follow the policies that he outlined.
Mr Healy replied that there is in fact a high take-up among eligible companies and that he may be interested to know that Her Majesty's Revenue and Customs, together with the Small Business Service, recently published a guide to try to help small companies with their applications for R and D tax credits.
Small firms
This was followed up by a question from Ed Balls, now Labour MP for Normanton and former special adviser to Chancellor, Gordon Brown. Mr Balls asked: "Will my hon. Friend encourage the Small Business Service to do more work with regional development agencies to encourage small companies to take up research and development tax credits? Does he agree that the Small Business Service would be less well placed to encourage small firms to benefit from the Government's support for research and development if it were abolished, as proposed by the Opposition?"
John Healey replied: "One feature of the Opposition's proposals before the election was their lack of support for the levels of investment in many things that are in place to secure the country's long-term growth and prosperity, including support for business through the Business Link service.
"As for the R and D tax credit, Business Link services run by the regional development agencies often provide specialist support for companies with R and D requirements. My hon. Friend (Ed Balls) will know from the performance of Yorkshire Forward, which offers the same service as One North East does in the north-east, that the R and D tax credit is a vital part - but only one part - of the measures that we are putting in place to support greater innovation, research and development and prosperity for our regional companies, all of which are essential for future growth.