Chancellor Gordon Brown’s pre-budget report held mixed news last week, as design groups look unlikely to benefit from the proposed extension of tax relief for research and development.
Under proposals that are set to be introduced in 18 months, certain innovation-led businesses involved in research will benefit from greater tax relief, in a bid to boost the UK’s ‘knowledge economy’.
Unfortunately, design is not likely to be included, despite a long campaign from the design industry to have design recognised as a key contributor to British innovation activity.
Design Council deputy chief executive Harry Rich says: ‘The report proposes to review the operation of the tax credit system for medium-sized companies, which we welcome, but based on previous experience we are not optimistic that it will resolve the issue of the exclusion of design activities from the R&D tax credit scheme.’
Designers should benefit in other ways from the Chancellor’s push on science and technology, though. Brown outlined plans for the creation of Science Cities for the North of England, through the Regional Development Agencies of Manchester, Newcastle and York, for example.
In his speech last Thursday, the Chancellor also announced the creation of a national Employer Training programme, which will give employees the right to obtain training from their employer for vocational qualifications equivalent to NVQ2s. The Learning and Skills Council will help employers to determine their training needs.
The Confederation for British Industry reacted cautiously to the news in a statement, saying: ‘Business is pleased the Government has no intention of compelling companies to participate through legislation. Any right to time-off would undermine the scheme’s success to date.’
The Chancellor also outlined plans to extend paid maternity leave from six to nine months from April 2007, as well as to introduce options to ‘transfer’ leave from mothers to fathers. Businesses complicit in tax avoidance, including those involved in ‘contrived remuneration’, will also face a Government crackdown.