Start-ups pile on Hunt to reverse R&D tax revamp

CHARLIE CONCHIE

PRESSURE is mounting on the Chancellor to scrap changes to research and development (R&D) tax credits in next week’s budget as over 150 start-ups and Britain’s biggest small business body launched a fresh offensive on the Treasury yesterday.

In an open letter published last night, the group of start-ups wrote to Chancellor Jeremy Hunt warning that planned cuts to the R&D credits, outlined in the autumn statement in November, will “damage the UK’s start-up ecosystem”.

Hunt’s plans will see the breadth of the existing scheme scaled back from the start of April and will slash the amount of R&D spend that start-ups can claim back from 33 per cent to 18.6 per cent.

The Sunday Times reported last weekend that Hunt is set to press ahead with the measures, with only small tweaks made for sectors like artificial intelligence and biotechnology to be outlined in the budget next week.

The changes have drawn the ire of startups across the UK, who argue that scaling back the scheme will hammer innova-