UK productivity has been almost flat since 2008. While the rest of the G7 has moved ahead, Britain’s small and medium enterprises remain stuck because they simply don’t have the spare cash to invest in new ideas, equipment, or processes. The current R&D tax relief system is too stingy and far too complicated for most SMEs to claim effectively. Larger corporations have entire departments to handle the paperwork; a local manufacturer or software house does not.
Doubling the enhanced R&D relief rate from the current level to 30 %, and radically simplifying the application process, would put real money back into the pockets of innovators. According to the Office for Budget Responsibility, every extra £1 billion of successful R&D claims generates £2.40 in wider economic benefit. That means a £5–£10 billion annual boost if we finally give small firms the same firepower as the corporates.
Big firms already enjoy generous schemes and armies of accountants; SMEs get confusing forms and months of delays. Level the playing field and we will see new products launched, production lines upgraded, software written, and thousands of new skilled jobs created across the country.
This isn’t about handouts; it’s about fairness and growth. Britain used to lead the world in invention because small businesses had the freedom and resources to experiment. We can do it again.
The 1832 Club is fighting for these changes. The more members we have, the louder our voice in Westminster.
Join today from just £5/month or £40/year and help to support pro-SME candidates.
Together we can make a difference.