The R&D tax credit was thrown into the spotlight again on Monday, when the Conservative Party pledged to simplify tax relief on research and development, which has not yet been extended to design buying.
The tax credit allows qualifying businesses to deduct up to 150 per cent of their expenditure on R&D when calculating profits for tax purposes. However, despite the prolonged effort of UK design bodies including the Design Council, design activities do not qualify for the tax relief like they do in other countries.
In its Action for Business manifesto, the Conservatives state they will ‘simplify the existing R&D tax credit regime and amend it to encourage companies to innovate and invest in design activities that will connect British science and technology with the marketplace’.
Chancellor Gordon Brown has not yet opted to bring design activity into the scheme.