With the 2024 General Election just a week away, Luke Hamm, Managing Director of Source Advisors and R&D tax expert, has delved into the manifestos of the Labour and Conservative parties to understand their plans for research and development.
R&D Tax Relief Commitments
The current government is committed to maintaining the R&D tax relief system intact. While Labour’s manifesto does not explicitly mention R&D tax relief, they propose a more sector-focused approach that could impact the current scheme. Labour aims to support small businesses and startups by providing access to funding, potentially including R&D tax incentives. On the other hand, the Conservatives emphasize that greater returns on investment come from larger businesses taking significant risks.
Sector Support by the Parties
The Conservatives highlight the Advanced Manufacturing Plan, encompassing Automotive, Aerospace, Life Science, and Clean Energy sectors. Additionally, they mention innovation in Agriculture, particularly in fertilizers and vertical farming. Labour backs sectors such as Research Institutions, Professional Services, Advanced Manufacturing, Automotive, and Life Science. They also prioritize investing in the steel industry and AI, with a focus on green energy initiatives.
Focus on Creative Industries
Both parties recognize the value of the Creative sector and commit to investing in its growth to maintain its significance in the UK economy with global appeal.
Innovation Support Structures
The Conservatives plan to continue with the current support structures, including the catapult networks. In contrast, Labour proposes a new Industrial Strategy and the establishment of a Regulatory Innovation Office to ensure regulations and policies align with future innovation trends, such as AI adoption.
Despite tax incentives not being a prominent topic in the election discourse, future budget announcements may shed more light on fiscal policies related to research and development.
