PROPOSED NEW TAX CREDIT FOR R&D IN MOTORSPORT VALLEY UK WELCOMED AS A POSITIVE STEP TO BOOST BUSINESS
Government proposals which reward increased R&D investment by large UK motorsport companies will have a major positive effect on the supply chain of SME’s in Motorsport Valley UK, were welcomed by the Motorsport Industry Association, the industry’s trade organisation.
The Motorsport Industry Association (MIA), in the past year or so, has joined with others to lobby Government for increased support for R&D investment by larger high performance engineering and motorsport companies, following the outstanding success of the scheme for SMEs which has, significantly, encouraged more R&D spend by the UK motorsport industry, in recent years.
“This consultation is really good news. Motorsport companies in the UK invest more than 30% of their sales into R&D, and most SME’s claim tax credits for their R&D. Creating a new tax credit scheme, aimed at large companies in the UK’s motorsport sector, to reward increased R&D investment, will benefit the entire supply chain, as it will make these industry leaders more competitive, and willing to commit to larger, longer term programmes with suppliers, with more confidence. We encourage all large companies in our sector to engage fully in this consultation process to ensure maximum benefit ” said Chris Aylett, CEO of the MIA recently.
The MIA welcomed the recent commitment, by the UK Chancellor, to introduce an “Above the Line” (ATL) credit, in 2013, to encourage research and development (R&D) activity in the UK by larger, and multi-national, companies (i.e. those with more than 250 employees and sales over ~£41 million).The ATL credit is intended to play a central role in any decision making process for R&D investment by UK companies.
The UK Treasury has now issued a consultation on an ATL tax credit for R&D, running until 29th June 2012, for larger and multi-national companies. They seek views from businesses on the detailed design of the ATL credit scheme, due to be implemented in April 2013, and set out proposals on how it could be implemented. They want feedback from individuals, companies and representative/professional bodies.
The Treasury’s commitment follows recent reforms which improve the R&D tax credit for SME’s, and make their scheme, significantly, more generous. It is not proposing to change the existing SME R&D tax credit to an ATL credit, and the level of support, under the small business scheme, will not be reduced, as a result of these changes. In a recent Treasury consultation, around 75% of respondents felt that a move to an ‘above the line’ (ATL) tax credit would increase the level of R&D investment in the UK.
The Motorsport Industry Association strongly encourages all large motorsport and high performance engineering companies to respond to this important consultation, as their views will be important in shaping the final proposal to gain maximum benefit. The MIA offers help - email
to secure expert advice from professionals.