Designs for Innovation
In the consultative document "Increasing Innovation", published in March 2001, we set out two initial approaches for an R&D tax credit:
- an incremental scheme – based on a company’s additional R&D activity; and
- a volume scheme – based on a company’s total R&D activity.
There was widespread support for extending R&D tax credits to larger companies. The responses to the consultation, summarised in section 2 and detailed in Annex A, strongly supported a volume scheme. In light of this, the Government has decided to adopt a version of a volume based tax credit.
This document presents three volume based options. The Government believes that the most effective way to increase innovation is to work in partnership with business. It is seeking the views of business and interested parties as to which option is likely to be the most effective in increasing innovation.
Please send responses to this document by 18 January 2002 to:
David Harris
R&D Consultation Team
Inland Revenue Policy (Business Tax)
4W1 22 Kingsway
London
WC2B 6NR
E-mail: david.harris@ir.gsi.gov.uk
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