The government spends around 0.49% of GDP on funding research and development (R&D), prompting business groups to call for an increase to help increase growth.
The Confederation of British Industry (CBI) is calling on the government to increase total R&D spending to 3% of GDP as research shows that the current level of spending is the lowest among the G8.
John Cridland, director general of the CBI, said:
“Innovation investment has never been more important, given its effect on enhancing productivity.
“While our economy is doing well, we must not be complacent, as we cannot afford to rest on our laurels while our peers pace ahead.”
The CBI wants the government to set out a “coherent framework” to boost innovation and create more capacity in the economy in the long term.
Getting the most out of R&D
In order to qualify for government tax credits or relief a company must be engaging in R&D activities that are:
- systematic, investigative and experimental
- carried out in an approved scientific or technological field
- seeking technological or scientific advancement
- seeking to resolve uncertainty.
The rates of relief available depend on the size of your company.