Research and analysis
Evaluation of the research and development expenditure credit
This report evaluates the direct impacts of the research and development expenditure relief.
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This report studies the effectiveness of the research and development expenditure credit (RDEC), which is designed to incentivise greater business investment in research and development (R&D). Investment in R&D can increase productivity, so it is important for the long-term growth of economies.
This evaluation estimates that for every pound spent on R&D tax credits, between £2.4 and £2.7 is additionally invested in R&D by UK companies. The results are in line with the effectiveness of RDEC’s predecessor, the Large Company scheme, which was evaluated by HMRC in 2015 to stimulate around £2.35 for every pound of tax relief.