Key Takeaways from CBI 2024: How These Topics Impact Innovation Funding Claims

In this article, we will not only review the key topics discussed at the Confederation of British Industry (CBI) Annual Conference 2024, but also analyse how these points directly impact R&D Tax Relief claims. The conference highlighted fundamental issues shaping the UK economy, particularly in areas such as public-private collaboration, long-term political stability, and the essential role of innovation. For businesses investing in research and development (R&D), these topics open new doors and present significant opportunities to take advantage of available tax incentives.

One of the key points discussed at the conference was the need to strengthen collaboration between the public and private sectors. This cooperation is seen as crucial for accelerating the development of key technologies in areas such as clean energy, artificial intelligence, and life sciences (CBI, 2024). The synergy between businesses and government can be especially relevant for projects aimed at achieving national goals such as the transition to a zero-carbon future and leadership in new technologies (GOV.UK, 2020)

How could this impact R&D Tax Relief?

Collaboration between the public and private sectors provides a way for private Ltd companies to access new funding opportunities and collaborative projects, as well as optimise their R&D Tax Relief claims. However, according to some clients we’ve had, it is essential for companies to properly manage the documentation and justification of their R&D activities to ensure alignment with HMRC criteria and maximise available tax benefits. When done right, this ensures businesses get the most out of the R&D Tax Relief scheme, supporting their continued innovation.

The conference emphasised the importance of establishing a stable and predictable environment to allow businesses to plan their investments long-term, particularly in high-investment sectors like R&D. Entrepreneurs called for clear and consistent fiscal policies to avoid unforeseen changes that could affect their investment decisions (CBI, 2024).

How does stability encourage investments?

The stable and predictable environment discussed at the conference directly impacts Ltd companies involved in R&D activities in the UK. Fiscal stability not only provides them with the confidence to plan long-term projects but also encourages increased investment by restoring trust in the R&D Tax Relief scheme. This relief provides crucial support, reducing the financial burden on businesses and stimulating investment in innovation. The certainty that tax benefits will be available throughout their projects offers a solid foundation for Ltd companies to remain competitive, continue innovating, and contribute to the UK’s economic growth.

Innovation was another central theme of the conference, identified as the key driver of economic growth. Sectors such as artificial intelligence, biotechnology, and clean energy are at the forefront of this drive (CBI, 2024). However, it was acknowledged that while the UK leads in research, scaling these innovations remains a significant challenge.

How to overcome these challenges?

As businesses in key sectors face challenges in bringing their products to market, R&D Tax Relief is an essential tool to overcome financial barriers. The scheme helps finance the scaling of advanced technologies, maximising the return on R&D and facilitating tax claims that allow reinvestment in new innovations. This accelerates product commercialisation and strengthens the competitiveness of businesses, contributing to the UK’s economic growth and leadership in key innovation sectors.

Another crucial topic discussed was digital transformation, particularly how emerging technologies such as artificial intelligence and automation are reshaping productivity and competitiveness. The conference highlighted the importance of integrating modern digital infrastructure in both the public and private sectors to enhance business competitiveness and public services (CBI, 2024).

What are the challenges?

Many businesses struggle to document their digital transformation projects as eligible R&D for HMRC, despite the potential to qualify for tax relief. Projects involving advanced technologies like AI and automation can meet the criteria if they address technological uncertainties. Expert advice is crucial to mitigate the risk of an enquiry, ensuring claims are accurate, compliant, and defensible. With proper guidance, companies can confidently navigate R&D Tax Relief, maximising benefits while minimising risks. Clear documentation and justification of such projects are key to successful claims.

One of the key points raised at the conference was the need to support small and medium-sized enterprises (SMEs), which often face greater difficulties in financing their R&D activities, especially in early growth or expansion phases (CBI, 2024).

How does this benefit SMEs and relate to Easy R&D?

This scheme is a fundamental tool for SMEs, as it helps reduce innovation costs. This is particularly important for startups and expanding companies, which face financial barriers to investing in innovative projects. In fact, between 2021-2022 and 2022-2023, the total number of claims under the SME scheme decreased by approximately 23% (GOV.UK, 2024).

Although SMEs face certain obstacles due to intensified compliance efforts by HMRC, this does not mean they cannot continue claiming R&D Tax Relief. It is essential for SMEs to focus on key aspects such as detailed documentation, clarity in R&D activities, regulatory compliance, and specialised advice to ensure their claims are legitimate and successful, maximising benefits without unnecessary risks.

CBI 2024 highlighted that collaboration, stability, and innovation are crucial for the UK’s economic future. For businesses investing in eligible activities, R&D Tax Relief remains an essential pillar that reduces costs and encourages investment in new technologies. At Easy R&D, we are committed to helping businesses navigate this changing landscape, ensuring they make the most of available tax opportunities while complying with HMRC requirements effectively and efficiently. This economic environment offers a win-win for businesses and the government, as R&D investments not only benefit businesses in terms of competitiveness but also contribute to the UK’s development and global leadership in innovation.