Will the R&D tax credit change in the Autumn Budget?

Will Labour revise state help designed to foster R&D in the upcoming Autumn Budget?

Rachel Reeves and Keir Starmer meet apprentices and staff during a visit to PsiQuantum
(Image credit: Christopher Furlong/Getty Images)

Could research and development (R&D) tax credits be a target for Rachel Reeves in her first Budget? The annual cost of the credits, paid to businesses investing in innovation, has increased to around £7.5 billion a year. And amid warnings that not all claims are bona fide, that pot of cash could make a tempting target. 

More than 55,000 small businesses received R&D tax credits last year, the latest figures from HM Revenue & Customs show, underlining the value of this scheme to large numbers of companies. However, the scheme has already undergone substantial changes, with reforms introduced in April aimed at simplifying the system and cracking down on ineligible claims.

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David Smith is manager of the Henderson High Income Trust.