Labour’s pre-election backing for innovation incentives could now deliver boost for Bristol businesses

July 5, 2024

Bristol’s status as a hotbed for innovation could be strengthened if the new Labour government sticks to commitments over support for research and development made ahead of the General Election, according to a city-based accountant.

Sam Wood, pictured, a tax specialist at Albert Goodman, said Labour had pledged to support the type of tech companies that made Bristol a leader in emerging technologies and clean energy. 

The party had not sought to instigate further changes to the R&D tax incentive system itself, which has already undergone a new evolution, he said.

Also ahead of the election it had conceptualised its National Wealth Fund, which seeks to invest more than £7bn in clean energy through incentivising ports, gigafactories and carbon capture.

Labour had also said it wishes to work with universities to encourage them to offer spinouts a ‘founder-track’ option, one where the university takes a share of equity at or below 10%, helping them scale with better access to funding.

Sam said: “There’s been a lot of uncertainty around research and development tax relief following the significant changes to the incentive, but my message to the business community would be to not let this recent turbulence deter you from obtaining key funding.

“R&D tax relief is fundamental to so many businesses across the South West in markets from aerospace and animation to life sciences and software development.”

He said Albert Goodman would be making sure its clients do not miss out on crucial tax credits, which can prove invaluable to start-ups and scale-ups.

“As a region, the South West is a hub of innovation across a rich diversity of sectors feeding into the UK’s wider R&D effort,” he added.

“Central to this success are the universities in Bristol, Bath, Exeter and Plymouth which are using expertise and experience to foster an array of start-ups and spinouts in the early stages of their innovation journey.

“It is encouraging that the Labour Party recognises the importance of rewarding innovation to ensure the UK remains competitive and attractive in the global environment.

“But care will need to be taken to ensure that a carefully balanced environment of an attractive relief and a well-directed compliance strategy from administrators of the tax incentive encourage rather than stifle innovation.

“The South West remains at the forefront of technological innovation and to maintain that momentum my message to business leaders would be not to hold back on your endeavours to seek funding and be aware of the incentives available to you that you may need to drive those R&D ambitions.”

Grant-funding opportunities in the South-West have seen quantum computing companies in Bristol taking advantage of enhanced funding.

There has also been a greater take-up of the Innovate UK Launchpad programmes with a focus on marine and maritime industries in the South-West. Total Innovative UK Launchpad funding looks to increase by an additional £44m in 2024.

It is estimated £375m in R&D tax relief was claimed by South-West businesses in the 2021-22 tax year with more than 65% of this benefiting businesses in the manufacturing, information and communication or professional, scientific and technical sectors.


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