Statistics recently published from HMRC reveals that the number of claims for R&D tax credits is on the rise.
R&D tax credits are a tax relief designed to encourage greater R&D spending, which leads in turn to greater investment in innovation. SME’s can claim 230% tax relief for qualifying expenditure as long as their turnover doesn’t exceed €100m, they have fewer than 500 employees and assets less than €86m. If loss making, a company can claim a repayable amount of 14.5% of the enhanced R&D expenditure.
The report shows that there was a 22% rise in the number of SME claims for the year 2015-16 to 21,865, claiming £1.3bn in terms of value. The increase in claims is largely down to the increase in first time claims since the £10,000 minimum claim threshold was removed, and also the rise in enhanced expenditure rate to 130% which came into effect on 1st April 2013.
Broadly speaking, if your business activities include the resolution of scientific and technological challenges/uncertainties to create or adapt products, processes or solutions than it would be likely that the business can qualify for enhanced tax credits. The largest proportion of claims sit within the manufacturing industry with just under £900m, however, a range of business sectors have benefited from the R&D incentives, for example, Engineering and IT based companies.
Haines Watts Leicester have a strong track record in helping identify R&D activities and securing successful R&D claims. If you think you may be eligible or would like more information on R&D, please contact us.
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