Budget 2011: Chancellor to refocus R&D tax credits Sir James Dyson believes enhanced reliefs for small technology companies and investors will form part of the Chancellor's growth Budget The Treasury is considering increasing the research and development tax credit for small technology companies to 200pc, Sir James Dyson has said. The Conservative Party adviser and founder of household appliances group Dyson said more generous tax breaks for technology companies and the investors financing them could feature in the Chancellor’s March Budget. “I believe they are considering the rise in tax credits, at least a narrowing of technologies [that meet the criteria],” said Sir James. “And they are looking at how to fund start-ups, particularly spin outs from university. I think we need a huge increase in the number of angel investors in Britain. We need to encourage people with what is a risky investment. We should be encouraging them with generous tax reliefs.” Sir James also said the Enterprise Investment Allowance, which provides income and capital gains tax relief, should be “increased and skewed and biased towards development technology in manufacturing”. RELATED ARTICLES Institute of Directors lays out growth blueprint toTreasury 07 Feb 2011 George Osborne considers greater tax on non-doms 07 Feb 2011 Government told to keep faith with cuts 02 Feb 2011 The Treasury is consulting on the future of the R&D tax credits system, which was introduced in 2000 and has supported nearly £52bn of R&D activity. Officials are looking at ways of better targetting the relief so that more "genuinely innovative" companies benefit but do not envisage and overall increase in the cost of the scheme, which was claimed by 8,350 companies last year at an estimated cost to the Exchequer of £980m. Speaking at the ‘topping off’ of a new Royal College of Art facility for design engineering start ups, financed in part by a £5m donation from his foundation, Sir James said that as public spending cuts hit individual businesses should do more to support Britain’s enterprise infrastructure. “We will do what we can on our own but more of these should be done by industry,” he said. Sir James pointed to other investments being made at universities like Oxford and Cambridge, but added: “Industry needs to be sponsoring more and more post graduate work.” Sir Martin and Lady Audrey Wood, co-founders of global engineering firm Oxford Instruments, the first spin-out company from Oxford University in 1959, have just donated £10m towards the £30m cost of a centre for science and enterprise at Oxford. The centre will aim to attract over 100,000 visitors a year as well as provide incubator space for 30 start ups. Sir James said he backed the RCA’s expansion plans because of the commercialisation of design and technology ideas pioneered by the college, Imperial College and Tanaka Business School. “Post graduates have combined with students from Imperial and Tanaka Business School in a new masters class where they develop products and they need space and facilities to develop those ideas into commercial reality,” said Sir James. “It's a launch pad for everything that everybody says we need.” Sir James said the contribution made by design was “widely misunderstood”. “Design is seen as a nice activity to make things look good as opposed to encompassing the whole product,” he said. He added that Michael Gove, the Education Secretary, was supportive of his campaign to encourage more schools to provide design and technology qualifications. “I think it should almost be compulsory in schools. Children should not be afraid of technology,” said Sir James. Source: Telegraph << Back Author: Richard Tyler

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