Cautious welcome to Budget

Cautious welcome to Budget
Alex Mayhew-Smith The electronics industry has cautiously welcomed changes in the government’s recent Budget that encourage high-tech business in the UK. David Armstrong, joint director of electronics and telecommunications at patent specialist BTG, said of the new R&D tax incentive scheme: “It has generally got to be a good thing, focused on small and medium sized enterprises – a sector that needs encouraging.” However, he cautioned that we would have to wait and see if the incentive merely served to help existing firms to reduce the cost of R&D expenditure rather than encouraging new R&D work. The tax incentives will relieve firms investing more than ?50,000 on R&D up to 24 per cent of expenditure. Other Budget incentives to encourage the growth of UK high-tech industries include a commitment to simplify intellectual property regulations; a tax relief scheme for firms taking 5 to 20 per cent stakes in companies with gross assets of up to ?15m; a ?26m extension to the Smart scheme, which awards grants to small and medium sized enterprises; and a further ?15m available for the University Challenge Fund which provides money for universities to turn research into business ventures. Ian Courtney, a director with the Welsh Electronics Forum, was more optimistic about the Budget, saying: “I am very pleased to see that the measures in the Budget complement the measures included in the government’s Competitiveness White Paper.” Details of the government’s plan to implement the White Paper were also issued. Among the measures to be introduced were plans to encourage risk taking and investment in R&D, including a review of bankruptcy and insolvency laws.


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