Design chiefs’ plea for tax breaks in Budget

Design industry leaders are calling on the Chancellor, Gordon Brown, to encourage companies across all sectors to invest more in design and development by increasing tax breaks available to design groups.

The design chiefs’ call comes during a week of pre-Budget reports by the Labour and Conservative parties, designed to set the tone of the Chancellor’s Budget in March.

Incentivising the design stage of research and development, which can be as costly as the research stage, would give the design industry a vital boost, says Design Council chief executive Andrew Summers. He suggests that the definition of R&D ought to be extended to incorporate design wherever possible.

“The best the Budget can do for the design industry is nurture the growth of the sector in this way rather than throw money at it,” adds Summers. “The Government can help our industry by creating greater awareness of, and demand, for our work.”

Education and training are areas that would benefit from more investment, says Ticegroup chairman Ian Cochrane. “The design industry is lousy at training. It should allocate as much money for this as it does for technology, because budgets are usually tight,” he says.

Summers agrees investment in higher education, already a long-term aim for the Government, is vital to develop the design industry. Cochrane also suggests Brown should reduce Capital Gains Tax to stimulate investment in small businesses, which form a large part of the design industry and are often too dependent on venture capitalists.

Amanda Merron, director of accountant Willott Kingston Smith, says the Government must reduce the amount of red tape for businesses in general, particularly concerning freelance staff. “Companies risk paying too much tax when using freelances, as the definition ‘freelance’ – whether or not they are officially employees – is still woolly. This generates a huge amount of paperwork for design consultancies using freelances regularly,” she says.