Written question asked by Baroness Kramer (Liberal Democrat) on Tuesday, 10 July 2018, in the House of Lords. It was due for an answer on Tuesday, 24 July 2018. It was answered by Lord Henley (Conservative) on Friday, 20 July 2018 on behalf of the Department for Business, Energy and Industrial Strategy.

UK Research and Innovation: Taxation

Question: To ask Her Majesty's Government what tax liabilities UK Research and Innovation (UKRI) has generated since its inception; what estimates they have of the extent of these liabilities in this financial year and the next; and whether such tax liabilities will reduce the funds available to UKRI for distribution via Research Councils.

Answer: Like many other non-departmental bodies, UKRI’s tax liabilities include VAT and business rates. As UKRI is a new body, we are working with HMRC and HMT to ensure it pays the necessary and appropriate levels of tax. While details are being worked out, UKRI is meeting all new costs centrally and there has been no impact on Research Council spending. UKRI estimates the potential additional tax impact on running costs, following the creation of UKRI, to be £15m per annum. Further to this, some of UKRI’s capital projects previously qualified for VAT relief, so the impact of UKRI’s new legal status on this is being assessed and will be factored into UKRI’s planning going forward. UKRI and BEIS remain focussed on maximising spend on frontline science and research.

Secondary information