UK Business Sector Calls For Reform Of R&D Tax Credit Scheme

by Jason Gorringe, Tax-News.com, London

20 April 2004

According to the results of a recent survey conducted by accounting firm, KPMG, the UK's research and development (R&D) tax credit regime needs significant reform in order to become relevant to SMEs.

Around 30% of the medium-sized enterprises questioned by KPMG revealed that they had not heard of the tax credit scheme, and just 5% felt that it had encouraged them to invest more of their resources in research and development.

Despite a recent attempt by the government to clarify the definition of R&D for the purposes of receiving the credit, more needs to be done, according to KPMG tax partner, David O'Keefe.

Speaking last week, Mr O'Keefe explained that:

"The change that has been made by the Government is simply a change in wording. The process of applying remains the same. What needs to be done is for the process to be simplified to make it less daunting and less time-consuming for smaller companies. More needs to be done, too, on publicising the scheme."

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