Start-ups pile pressure on Hunt to reverse R&D tax overhaul

In an open letter published last night, the group of start-ups wrote to Chancellor Jeremy Hunt warning that planned cuts to the R&D credits, outlined in the Autumn statement in November, will “significantly damage the UK’s start-up ecosystem”.

Hunt’s plans will see the the breadth of the existing scheme scaled back from the start of April and will slash the amount of R&D spend that start-ups can claim back from 33 per cent to 18.6 per cent.

The Sunday Times reported last weekend that Hunt is set to press ahead with the measures, with only small tweaks made for sectors like artificial intelligence and biotechnology to be outlined in the budget next week.

The changes have drawn the ire of start-ups across the UK, who argue that scaling back the scheme will hammer innovation investment just as government mounts a push to make Britain a “tech and science superpower”.

Coadec and signatories of the letter have now called on the Chancellor to scrap the plans and reveal more support in the budget next week.

“Government-backing twinned with British entrepreneurship has built one of the best start-up ecosystems in the world, but these R&D changes put it at risk,” said Dom Hallas, executive director of Coadec. 

“The planned R&D tax credit cuts will mean less money for tech start-ups, less hiring and less innovation.”

Read more at City A.M.