R&D credits ‘put all firms on the same footing’

The abolition of the base year for the research and development tax credit will act as a leveller setting all companies on the same footing and make R&D more attractive to businesses, according to a leading taxation expert.

Last year, Michael Noonan committed to abolishing the base year — which restricted companies to claiming the 25% tax credit solely to R&D spending in excess of what was invested in research activities in 2003 — when resources allowed.

Yesterday, Mr Noonan made good on his promise and announced the phasing out of the base year from January 2015.