Last week, HMRC published the latest Research and Development tax credit statistics for 2000-02 to 2016-17. So, what did it show?
An upward trend
The number and value of R&D claims continues to increase. There were 43,040 claims in 2016-17 and 39,960 claims in 2015-16; an increase of 7.7%. The figures for 2016-17 aren’t finalised yet as the return period is still open for claims to be made
And the total value of R&D expenditure against which claims were made was £24.9bn in 2016-17, which equates to £3.5bn of R&D tax relief support.
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. But it’s also clear that there are still a considerable number of eligible companies that aren’t making claims.
Chris Knott, our Head of R&D Incentives, pointed out that “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 aren’t making (or indeed maximising) claims. We hope this will encourage many other innovative businesses to grow and expand using the R&D incentives available to reach their full potential”.
It’s interesting to note that the number of first-time applicants for R&D tax credits fell from 12,530 in 2015-16, to 6,975 in 2016-17. This is the first time that the number of first-time applicants has decreased since 2005-06.
There’s no doubt a large number of eligible companies are failing to make R&D claims, and therefore if you’d like to explore your company’s eligibility in more detail, our R&D incentives team would love to chat.
Making the process pain-free
According to HMRC’s report, only 5,770 of the claims made in 2016-17 were made in the Midlands (2,430 by clients situated in the East Midlands, and 3,340 in the West Midlands).
Our R&D Incentives Manager, Donna Challinor added: “So many companies fail to make a claim because they’re too busy with their day jobs and don’t appreciate the extent to which the work they do can qualify for these generous reliefs (up to 33% of spend back). We can work with these companies to ensure the claim process isn’t onerous, and the results could make a significant difference to their company’s cashflow”.
You can read HMRC’s full report by clicking here..