Technology suppliers have welcomed chancellor Gordon
Brown’s budget announcement that research and development tax
credits are to be extended to firms with up to 500 employees, up
from 250 currently.
Tom Wills-Sandford, deputy director general of hi-tech industry
body Intellect, said the tax credit extension would “help SMEs who
originally fell out of this bracket.”
He said software companies would “particularly benefit, as a
large number currently fall into this category.”
Intellect said the chancellor was also on course to introduce
training for tax inspectors to make sure they understand software
R&D procedures.
“A clearer outline of the training plans is expected this summer
and we look forward to working with HM Revenue & Customs when
laying the foundations,” it said.
For IT contractors and consultants, the budget also offers the
promise of a simpler tax and national insurance regime in the
future – a review of the current arrangements having been
commissioned.
The Professional Contractors Group said the planned review
offered “a clear opportunity to address the unfair and inconsistent
intermediaries legislation, known as IR35, as well as the enormous
complexity of the taxation of freelance consultants and
contractors.”