Call to end "deadweight" R&D tax breaks
The IPPR has said that up to 80% of tax credits for R&D are a "deadweight" and the subsidy should be largely abolished, saving up to £1.9bn a year. The thinktank would also like to see the phasing-out of the patent box scheme, noting that in the 2014/15 financial year 95% of the tax relief claimed went to 305 of the biggest UK companies. "The evidence suggests that neither of these indirect support mechanisms through the tax system are effective at expanding and diversifying the UK"s base of innovating businesses," the IPPR said. It added that small businesses should be incentivised to raise productivity by rewarding firms that meet certain standards with a 1% cut in their corporation tax rate.
Source: The Daily Telegraph (17/11/2017)