Innovation has always been one of the UK’s strengths and a vital factor to ensuring our return to economic prosperity. It is instrumental in improving productivity, creating new goods, services, and expanding our markets. With continued economic uncertainty, business investment in Research and Development (R&D) is historically low and likely to suffer yet further contraction.
A recent report by the EEF (Engineering Employers Federation) revealed; in order to generate a more balanced UK economy, companies should look to bring new services and products to market. Continuous focus on developing new products, services and processes will drive productivity and sales allowing the UK to catch up with competitors such as Germany and the US.
Innovation is a critical component of economic competitiveness. Firms that invest in innovation grow faster and are more productive. R&D tax credits are the single largest Government support for business investment in R&D and continue to be a key driver of innovation. They allow companies to deduct qualifying expenditure on R&D when calculating profit for tax purposes.
April 2013 will see a new scheme – The Patent Box enables companies to apply a lower rate of Corporation Tax to profits earned after 1 April 2013 from its patented inventions and certain other innovations.
Haughton Design’s MD, David Mills, applauds these schemes “It is great to see a scheme which encourages companies to be more innovative. Since the scheme has been launched many of our clients have benefited from the scheme, including ourselves.”
He continues “With an uncertain economy, lower manufacturing output but booming stock market companies, continue to be cautious. These schemes increase rewards from the financial risk involved in new product development and should help reinvigorate the manufacturing sector. Everyone is keen to keep manufacturing in the UK, so encouraging companies to be innovative and create new products will ensure a much healthier economy and prosperity for us all.”