Spring Budget: Sunak’s R&D tax credits echo Kalifa recommendations
The extension of research and development (R&D) tax credits in today’s Spring Budget echoes a key recommendation laid out in last year’s Kalifa Review.
Chancellor Rishi Sunak pledged to extend R&D tax credits to include data, pure maths and cloud computing for the first time. The extension will come into effect in April 2023.
Fintech trade body Innovate Finance pointed out that the tax credit extension will likely lead to more investment in key areas such as automation, software as a service (SaaS) and open banking, as outlined in the Kalifa Review.
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“This important change, called for in the Kalifa Review, will incentivise greater investment by fintech companies in new products and services including AI, machine learning, open banking and SaaS – all of which will ultimately benefit the consumer,” said Adam Jackson, director of policy at Innovate Finance.
Although Sunak made no direct mention of fintechs in his Spring Budget, Jackson noted that the Chancellor’s efforts to bring down the cost of living will encourage fintech firms to do the same.
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“For many UK fintechs, the economic forecast in the Chancellor’s Spring Statement emphasised the cost of living and inflation challenges facing the consumers and small businesses they serve,” said Jackson.
“This will galvanise fintech firms’ commitments to provide innovative services that help customers reduce costs, grow their savings, and strengthen financial resilience – as well as helping those in vulnerable circumstances.”
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