§ Mrs. Curtis-ThomasTo ask the Chancellor of the Exchequer what incentives are in place to aid investment in research for smaller quoted companies; and what steps the Government are taking to make competition for investment capital less biased towards larger quoted companies. [40248]
§ Dawn PrimaroloAn R&D tax credit for small and medium sized companies was introduced in Budget 2000. The credit increases the tax deduction for current spending on qualifying R&D from 100 per cent. to 150 per cent., reducing the cash cost of R&D by 30 per cent. for a company paying tax at the small companies rate. The credit can also be paid to companies that are not yet in profit, at a rate of 24 per cent. An R&D tax credit for larger companies will be introduced in Budget 2002. There are also 100 per cent. allowances for R&D capital spending, which are available to all companies and allow immediate tax deductions for qualifying capital expenditure.
The Government commissioned the Myners Review in 2000 to look at factors that may be distorting the investment decision-making of institutions. The review reported in March 2001 and found weaknesses in the investment process that affect all quoted companies, including smaller quoted companies. The Government have accepted all the recommendations made in the review in principle and have published consultation documents on specific issues that were highlighted.
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