IT industry body Intellect has welcomed a government move to keep R&D tax credits, which it believes will protect IT jobs in the UK.
The Treasury has outlined a number of reforms to Corporation Tax, including a decision to retain the R&D tax credits - a scheme which provides tax breaks for companies that are investing in research and development. It has also introduced a 10% Corporation Tax rate on profits from patents for 2013.
Tom Wills-Sandford, deputy director general at Intellect, said the decision to keep R&D credits was good news for the industry.
There were rumours before the election that R&D credits might be under threat, with the government possibly lowering the overall rate of corporation tax and removing the credits instead, he said. "Among other things, [R&D credits] are responsible for keeping a number of large laboratories here in the UK and securing jobs. For R&D intensive companies, this is more cost effective than an [overall] corporation tax reduction. It is important for us to be competitive and have an innovative industry," said Wills-Sandford.