The uncertainty of the UK’s future relationship with the EU, after the Brexit referendum, has not resulted in major economic turmoil. Some investments have already been announced, as Facebook Inc. will add 500 employees in the UK in 2017, and Google’s parent company, Alphabet Inc., plans to expand its London campus.
In the autumn statement, Phillip Hammond, Chancellor of the Exchequer, announced a new National Productivity Investment Fund (NPIF) of £23 billion to provide additional spending for transport, digital communications, research and development, and housing. The £2 billion extra for research and development by 2020 is in addition to the research and development tax credit scheme, which provides nearly £2.5 billion in tax credit incentives to businesses investing in research and development, and Innovate UK, which has £561 million in 2017 available through its funding competitions to help drive innovation and grow the UK economy.
Although it seems obvious, it is important to remember that innovation, whether in technology or the life sciences, in manufacturing or in communication, is happening internationally, not just in the European Union. UK-based companies may need to look for partners and opportunities outside the borders of the EU, but these types of diverse opportunities all over the world can only be good for innovative UK companies, and will make further advancements possible.
The government will also review the tax environment for research and development to ensure that the UK tax system is strongly pro-innovation and builds on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place for companies to do research and development. The favorable tax incentives give companies the chance to do more with their current workforce, provide funds to hire new employees, and make it possible to build new facilities and buy or create new, state of the art equipment and materials.
While the UK’s continued participation in the EU’s Horizon 2020 program, with its budget of nearly €80 billion for the seven years from 2014 to 2020, is still a topic for negotiation, until the UK actually leaves the EU, all obligations and rights of the member states continue to apply, which includes eligibility for Horizon 2020 funding.
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