The Laboratory & Testing Industry Organisation (LTIO), the trade association for diagnostic testing companies and laboratories, has written to the chancellor to call on the Government to support SMEs following the sudden change in the research and development (R&D) tax credit system.
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The Government recently announced that it would halve the rate of R&D tax credit cash for SMEs which will significantly impact business plans and potentially reduce investment in the UK from SMEs.
Tom Watson, chair, The Laboratory Testing Industry Organisation said: “It is disappointing to see the Government reduce R&D tax credit cash for SMEs which is significant driver of innovation and economic growth in this country. Several SMEs, including our members, will have their business and investment plans affected due to this change.
“There are of course legitimate concerns about the abuse of the R&D tax credit system but it also vital measure of support for many SMEs, who rely on it to fund technology and product development activity.
“This change will undoubtedly disrupt business plans and potentially reduced investment in the UK from SMEs across the country by increasing the appeal of offshoring technology and product development activity. This change will also impact demand for highly paid developers, researchers, designers, and product management professionals in the UK, threatening its enviable technology talent ecosystem, which is a key driver of economic growth.
“In this economic climate, the Government cannot afford to alienate SMEs. Instead, it should be doing everything it can to encourage them to innovate and invest in the UK. We are calling on the Government to reverse this change and continue to support SME innovation.”
