Growth in R&D spend stagnates in wake of vote

Spending on research and development (R&D) by UK businesses has stagnated since the 2016 EU referendum and needs a major boost to hit a government target, it has emerged.

R&D spending is hovering at just 1.1 per cent of GDP despite the introduction of tax credits in 2000 designed to reward and encourage innovation. The UK government has a target of 2.4 per cent of GDP by 2027.

Earlier this year, it emerged that the UK was ranked 11th in the EU for R&D spend as a share of GDP.

Catax, an R&D tax relief specialist, said that growth in R&D spending had slowed dramatically in real terms since the Brexit vote two years ago, down to just 3.3 per cent in 2016 then 2.9 per cent in 2017, compared to “healthier” annual growth of between 5 and 6 per cent in the preceding five years.

Mark Tighe, CEO of Catax, said: “There is a clear slow down in R&D investment growth since 2016 which is a worrying sign as the UK speeds towards Brexit.”