Budget 2006 makes innovation credit available to more firms

Chancellor Gordon Brown has extended the research and development (R&D) tax credit to apply to more companies as part of a commitment to fostering UK innovation.

According to the Budget presented in the House of Commons today, the size of firms eligible for the credit is to rise from 250 to 500 employees.

Andrew Smith, chief economist at consultancy KPMG, said: 'Business will take encouragement from the Chancellor’s repeated references to the need for general economic success, and to enterprise and prosperity.

'The specific measures are helpful with enhanced incentives to invest in smaller companies and for businesses to invest in R&D.'