To encourage economic growth, the whole system of tax relief for R&D needs a revamp

We can't fix the fiscal mess the UK is in without economic growth.

- Dan Neidle

And that needs a tax system which incentivises growth - but too often our tax system does the opposite.

The level of business investment in the UK is one of the lowest in the developed world. Successive governments have spent 25 years trying to fix this with research and development tax-relief schemes costing the UK £8.4bn in 2024-25 alone. On its face, a triumph of pro-growth government industrial policy more than 60,000 companies claimed it. The reality: emblematic of everything that's wrong with tax policy.

When you tax something, you get less of it. So you'd think that if you tax-relieve something, you'd get more of it. Actually, what often happens is you don't get more of the thing you want; you just get more people claiming the relief.