Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will review changes to the Research and Development Expenditure Credit scheme to help incentivise small and medium sized enterprises to invest in research and development in the UK.

As part of the ongoing research and development (R&D) tax reliefs review, the Government is reforming the R&D tax reliefs to ensure taxpayer’s money is spent as effectively as possible, to improve the competitiveness of the Research and Development Expenditure Credit (RDEC) scheme, and as a step towards a simplified, single RDEC-like scheme for all.

Generous spending support will continue: direct funding for R&D will reach £20 billion a year by 2024-2025 as planned. This is a cash increase of around a third compared to 2021-2022, and the largest-ever increase over a Spending Review (SR) period.

The Government also remains committed to the increasing focus on innovation set out at SR 2021 and the £2.6 billion allocation to Innovate UK over the SR period. From 2021-2022 to 2024-2025, this represents a 54 per cent cash increase in Innovate UK’s budgets and 70 per cent of Innovate UK’s grants to businesses go to Small and Medium Enterprises (SMEs).