“You used to apply to local [tax] inspectors, now it’s a centralised unit. You
have to show real innovation,” he said, indicating that few companies would
be deemed suitably innovative by the central unit.
PriceWaterhouseCoopers found in a survey last year that a third of companies
that qualified for R&D tax credit did not bother to apply because the
process was too difficult. Awareness of tax reliefs among small firms was
just 41 per cent, and Kevin Nicholson, PwC's head of entrepreneurs and
private companies, said that the R&D relief did not encourage small
firms to carry out any more research and development than they would have
without the tax credit.
The proposed increases are subject to European Commission approval.
A spokesman for the Forum for Private Business said that the organisation was
reserving judgment on the funding for basic training.
“It sounds like a good initiative, but as always the devil’s in the detail as
to how that is delivered. It looks interesting.
“Risk-based employment tribunals, we think that’s a bit of a winner.”
The DTI is looking at simplifying the tribunals process, possibly
incentivising employers that try to settle disputes earlier. It has said
that such measures could save businesses £400 million a year.
Road tax
Carol Undy, FSB’s national chairman, said: "Increasing road tax on
larger engine vehicles and company cars will also hit small businesses that
use such a car or van for their business needs.”
She said that other environmental measures could also be counter-productive.
“On the Lyons Review we are pleased that there will be no return to setting
business rates at local level. But allowing a variation on top of the
business rate and other variable service charges, including a possible bed
tax, will lead to even more complexity for businesses to deal with on top of
already existing initiatives.”
CBI director-general Richard Lambert said that companies would be uneasy about
Sir Michael Lyons’s proposals for a supplementary business rate.
“They will be very relieved that responsibility for business rates is not
going to be returned to local authorities. But they will have to be
persuaded about the economic benefits that might come from a supplementary
rate and they will need to be formally consulted on every proposal to ensure
that their money will be well spent.”
