Recently HMRC unveiled new statistics showing there were just under 40,000 R&D tax credit claims for the tax year 2016 to 2017 and the majority – over 34,000 – were in the SME R&D scheme.
It’s good to see the majority of claims are coming from the SME sector as this is the backbone of our economy in the UK. However only a fraction of those companies which could make a relevant claim are doing so.
Either business owners don’t know about this scheme or they don’t consider what they are doing could qualify for this relief. However many companies are doing innovative things to grow their businesses which could qualify for this tax relief.
Examples of activities which could attract R&D relief might be:
- Productising a service e.g.. online courses to create a new income stream.
- Creating a new system or process to automate a part of a business allowing for growth.
- Integrating different systems to create a competitive advantage.
It’s important to take the proper advice, working with an accountancy practice which has the expertise and knowledge is critical before considering a new project to see if it qualifies and, if it does, to plan finances accordingly.
We recently helped one new client, providing supply chain software, to claim relief for the continuing development and improvement of its software. Their previous adviser had suggested they were not able to make a claim.
R&D tax relief is a valuable way of rewarding companies which are investing in innovation, either to create something new in their field or to improve on existing technology.
The HMRC figures also show during the tax year 2016 to 2017, £3.5bn of R&D tax relief support has been claimed, corresponding to £24.9bn of expenditure on R&D projects nationwide.
A breakdown of the statistics show claims are concentrated in companies with a registered office in London, the East of England, or the South East.
These figures show clearly that the South West region is not taking full advantage of this type of tax relief. We are home to some of the most innovative companies in the country and yet the overall figures show most companies area not even exploring the possibility that they may qualify for this valuable government tax relief,
Between the launch of the R&D tax credit scheme in 2000/01, and 2016/17, over 240,000 claims have been made and £21.4bn in tax relief claimed.
Find out more information by viewing our R&D website to answer any questions you may have.
To discuss R&D and see if you and your company qualify please get in touch with our specialists today.
Want to know more? Call us on 0117 974 2569 or email firstname.lastname@example.org