UK government to add cloud computing and data for R&D tax relief scheme


It was recently announced that new changes were introduced to the UK’s research and development (R&D) tax relief scheme in order to include cloud computing and data costs.

Indeed, these changes will help make the UK a science and technology superpower as well as modernising the private sector innovation. The expansion of tax reliefs to cover cloud computing and data costs was in the works for a while and this shows government recognition of how companies operate currently, especially as smaller businesses that use cloud computing and data-driven technologies have increased their annual turnovers in excess of £250,000.

Hence, the chancellor is planning to reform the R&D tax credit system in order to enable businesses to better use data and cloud computing services and upgrade the UK’s support for research and development. By doing so, it hopes to boost UK productivity. He added that the UK government is planning to incentivise greater investment in the country from April 2023.

The UK government yearly spending on R&D by the end of the current administration will be aiming to reach £20bn, in addition to the cost of R&D tax reliefs. This should help establish the new Advanced Research and Invention Agency with £800m by 2025-2026, and a boost to late-stage innovation with an increase to the core budget for Innovate UK to £1bn.