Innovation in the UK Retail Sector - Nesta
Innovation in the UK Retail Sector - Nesta
Innovation in the UK Retail Sector - Nesta
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<strong>Innovation</strong> <strong>in</strong> <strong>the</strong> <strong>UK</strong> <strong>Retail</strong> <strong>Sector</strong><br />
often require specialist tax advice <strong>in</strong> order to navigate <strong>the</strong> application process and this can<br />
be burdensome and disproportionately expensive:<br />
“…many companies rema<strong>in</strong> unaware of <strong>the</strong> potential relief available or are sceptical of <strong>the</strong>ir ability to<br />
make a valid claim” (Deloitte, 2007).<br />
8.19 Efforts have recently been made to <strong>in</strong>crease awareness of tax credits amongst smaller <strong>UK</strong><br />
firms and improve <strong>the</strong> regional adm<strong>in</strong>istration of applications. New specialist HMRC<br />
units have been established to counter <strong>the</strong> dom<strong>in</strong>ance of applications from London and<br />
<strong>the</strong> South East, as well as to create centres of expertise. Towards <strong>the</strong> end of 2006, tax<br />
<strong>in</strong>spectors undertook tra<strong>in</strong><strong>in</strong>g to improve <strong>the</strong>ir understand<strong>in</strong>g of software-related<br />
applications. However, it is too early to judge <strong>the</strong> effectiveness of <strong>the</strong>se measures <strong>in</strong><br />
stimulat<strong>in</strong>g uptake of <strong>in</strong>centives.<br />
8.20 Whilst <strong>the</strong>re might not be scope for dilution of R&D tax credits, <strong>the</strong>re might be potential<br />
for a degree of extension and simplification. For example, <strong>the</strong> i2010 work<strong>in</strong>g group<br />
recommended that R&D tax credits might be extended to <strong>in</strong>clude capital expenditure<br />
(allowed <strong>in</strong> o<strong>the</strong>r jurisdictions, <strong>in</strong>clud<strong>in</strong>g Canada) which would allow those companies<br />
capitalis<strong>in</strong>g manpower costs to be eligible to apply (Information Age Partnership, 2007).<br />
The work<strong>in</strong>g group also suggested that <strong>the</strong> scheme could be widened to allow <strong>the</strong> cost of<br />
overhead activities <strong>in</strong>directly support<strong>in</strong>g R&D work to be <strong>in</strong>cluded.<br />
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