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<p>Innovation and technological progress are central to driving long-term growth and
improving living standards. Evidence shows that countries with higher Research and
Development (R&D) activity tend to have higher productivity. The latest evaluations
published by HMRC show that while the R&D expenditure credit scheme for large
companies generates £2.40-£2.70 of additional R&D expenditure for each £1 of tax
relief claimed, the small and medium enterprise scheme generates £0.60-£1.28 for each
£1 of tax relief claimed.</p><p> </p><p>The Government continues to consider other
areas for reform as part of the ongoing review, in addition to the announcements set
out at Autumn Budget 2021. In considering other reforms, the Government’s objectives
remain to ensure that the UK remains a competitive location for cutting edge research,
that the reliefs continue to be fit for purpose, and that taxpayer money is effectively
targeted.</p>
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