| 0.2°C Belfast

Budget to bring good news for Northern Ireland research and development


Close

Tom Verner, Group Managing Director, Momentum R&D

Tom Verner, Group Managing Director, Momentum R&D

Tom Verner, Group Managing Director, Momentum R&D

As we count down to the first post-Brexit Budget it is clear the Conservative Party's election manifesto has the potential to boost manufacturing businesses, right across Northern Ireland - should it be implemented in full.

We welcome a pledge to increase Research and Development Expenditure Credit from 12% to 13% for larger businesses who have more than 500 employees and £100m turnover.

Support is also there for SMEs who can claim up to 33% in R&D tax credits. Currently claims from SMEs account for 82% of Northern Ireland's claims.

We could be talking about tens of thousands of pounds in tax benefits which would help companies further invest in growth, sustainability and innovation.

With every £1 spent on R&D returning £2.55, support for innovation continues to be a government priority.

In addition, a review of the definition of R&D to include areas such as cloud computing and data will be of great interest to our burgeoning tech sector, which currently supports almost 10,000 jobs. These areas don't necessarily scream R&D activity but in many ways the associated costs with them can act as a barrier to innovation.

According to the Department for International Trade, Belfast is the number one destination in the world for fintech development as well as a leading city in Europe for new software innovation. There are many areas that can count as qualifying R&D in the tech sector including AI and building future ready cyber security.

A total of £75m was paid out to businesses in Northern Ireland in R&D Tax Credits during 2017-18. To put the level of claims into perspective, HMRC figures showed that companies here claimed just 1.7% of the total funds paid out across the UK, representing just 2.7% of all claims.

So, if government support for innovation is a priority, why are more businesses not claiming a slice of the millions that have been set aside? In my view, the key reasons are a lack of awareness of the R&D incentive's existence and gaps in understanding of what qualifies as R&D activity.

With Brexit opening up new trade routes, R&D Tax Credits will be vital in 2020 for companies preparing for a period of growth outside the EU.

Please log in or register with belfasttelegraph.co.uk for free access to this article.

Already have an account?

Belfast Telegraph