How does your R&D claim stack up?
Tax Reliefs (including R&D)
Last week it was confirmed that the R&D landscape is set to face some big changes in the coming years, which could have a direct impact on you if you’re claiming relief, or looking to claim in the near future.
With changes just around the corner, and recent statistics showing that the average claim value is continuing to rise across both the SME and RDEC schemes, it’s more important than ever to have a clear grounding on how your claim stacks up to ensure you’re not missing out.
How do claims stack up in the North East?
For organisations who are pushing the boundaries and adopting a forward-thinking approach towards business, R&D continues to be one of the most valuable incentives on offer.
Our region has a strong grounding in construction, architecture and engineering, and has one of the UK’s fastest growing tech sectors, meaning that innovation is rife. That being said, claims in the region continue to fall behind the rest of the UK, having the lowest number of claims across both schemes (other than Northern Ireland), with only 2,760.
With the newly opened Freeport and initiatives like the Government’s Levelling Up agenda, we will see more forward-thinking ideas stem from the North East in the years to come, and the relief could play a huge role in bringing these ideas to life.
IT and communications continue to take the lead
When it comes to sector-specific R&D, IT and Communications make up nearly a quarter of all claims, with a huge 19,000 claims having been processed in their sector alone in 2019/20.
Whether it’s developing new software, improving systems or creating algorithms and apps, businesses within the sector continue to reap the rewards of the relief, with the average claim coming in well above the national average, at over £79K.
While manufacturing firms, and the professional, scientific and technical sector don’t fall far behind IT and Communications, numbers for construction businesses continue to lag behind. R&D is engrained into the construction industry – overcoming challenging, trialing new materials and increasing efficiencies are all often part of day-to-day business for many firms. But the number of claims came in at only just under 6,000 across the entire UK. With the average claim value exceeding £66K, the relief could be a lifeline for many construction firms, as the cost of living and supplies continues to rise.
Getting the most out of your R&D claim
With upcoming changes on the horizon and claim value varying so much between regions and industries, we would always recommend consulting an expert to maximise the value of your claim.
If you have any questions about R&D tax relief, or are looking for support with your claim, please feel free to get in touch with our incentives and reliefs team who are on hand to help.