Ryan specialists urge tax overhaul to boost innovation

Senior executives at Ryan, a global tax services, software and technology company, have set out a series of tax policy suggestions they believe the UK government should consider in the forthcoming Autumn Budget to stimulate innovation and support economic expansion.

Ryan European and Asia-Pacific operations president Tom Shave argued that productivity is declining with inflation at 3.8% and unemployment at 5%, the existing “build-our-way-to-growth” strategy needs to be reconsidered.

Shave said: “If Chancellor Rachel Reeves wants to supercharge the UK’s growth trajectory, she needs to incentivise ideas, innovation, and knowledge capital, as in the US, Ireland and Singapore. She needs to use tax and policy as active levers to reward the creation of intellectual value, not just physical assets.”

Ryan Corporate Tax principal Jenny Batchelor suggested to leverage tax deferrals to attract innovation investment rather than simply subsidising expenditure.

Batchelor said: “Despite the UK having constrained public finances, a targeted tax approach could still be structured to raise revenue. A deferral in corporation tax liabilities for UK-headquartered companies innovating in key priority sectors such as AI would allow current funds to be reinvested into people, skills, and commercialisation, whilst the businesses scale.”

Additionally, Batchelor added that introducing a more flexible VAT system such as allowing firms in those sectors to defer VAT payments would help stabilise cash flow and encourage quicker investment.

Addressing how existing incentives apply to modern business models, Ryan EAP Innovation Funding principal Justin Arnesan called for changes to capital allowances and research and development rules.

Justin Arnesan said: “A meaningful pro-innovation budget needs to update existing reliefs, so they reflect where modern IP value actually sits. The UK should widen the 100% full expensing regime so that the purchase of patents, licences, and software can qualify just like plant and machinery.”

Ryan R&D Director Nigel Holmes urged the government to streamline and expand the UK’s R&D tax relief framework.

Nigel Holmes said: “Expanding the cost base to cover rent, rates, capital expenditure, and patent legal fees would recognise the full cost of developing new products and technologies.”

Holmes suggested replacing the current dual system - where larger firms use the R&D Expenditure Credit, and smaller loss-making companies claim through the Enhanced R&D Intensive Support - with a single 40% credit to reduce complexity and provide clearer investment incentives.

Holmes added: “Alongside this, the newly introduced Claim Notification Form can block genuine claims and creates unnecessary complexity; this could be abolished and be replaced by a better Advance Assurance Scheme.”

Additionally, Holmes added that the restriction that stops companies from claiming tax relief on certain research and development work conducted outside the UK should be eliminated.

"Ryan specialists urge tax overhaul to boost innovation " was originally created and published by International Accounting Bulletin, a GlobalData owned brand.

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