Last week, HMRC published the latest Research and Development tax credit statistics for 2000-02 to 2017-18. So, what did it show?
An upward trend
Almost £4.4bn of support was claimed by eligible companies for 2016-17, an increase of 14% from 2015-16.
So far just over £4.3bn in support has been claimed for 2017-18. £2.3bn of that was claimed through the SME scheme, and £1.8bn was claimed by large companies under the RDEC scheme. On top of that, £225m has been claimed by small and medium sized companies, including subcontractors, also through the RDEC scheme.
The total cost for 2017-18 is expected to rise as more claims are received and processed by HMRC. Based on the timings of claims received in previous years, it’s estimated that the final cost for 2017-18 will be £4.95bn.
Eligible companies continue to miss out on making claims
It’s clear that UK innovation continues to be supported by the Government through the R&D incentives regime. And this is expected to continue regardless of the impending changes that may arise as a result of Brexit.
It’s also clear from the recent statistics that a considerable number of eligible companies still aren’t making claims. Chris Knott, our Head of R&D Incentives, pointed out, “The Government’s recent statistics are, once again, extremely positive with the clear upward trend in submitted R&D claims. However, there are still a considerable number of eligible companies that are not making – or indeed maximising – claims, so we hope this will encourage many other innovative businesses to grow, expand and reach their full potential using the R&D incentives available.”
Making the process pain-free
According to HMRC’s report, only 7,260 of the claims made in 2017-18 were made in the Midlands (3,120 by clients situated in the East Midlands and 4,140 by clients situated in the West Midlands).
Our R&D Incentives Manager, Donna Challinor, said, “We continue to meet a number of clients that believe the work they do doesn’t meet the criteria for R&D Incentives relief. This is either due to being misinformed or because they misinterpret the meaning of R&D for tax purposes (which is far from the traditional description).
Companies continually strive to develop their business to be at the forefront of their industry, and as a result can unknowingly be meeting the qualifying criteria for this generous relief. Our specialist team have considerable experience across a range of sectors, and we would be happy to discuss your eligibility to make a claim”.
To read HMRC’s full report, click here. Or feel free to get in touch if you’ve got any questions.