R&D Tax Relief claims: The latest figures from HMRC

December 10th, 2018

Claims for R&D tax relief are on the rise according to new statistics released by HMRC, demonstrating that more businesses are seeing the value in the government incentive scheme.

R&D tax credits were introduced in 2000 to encourage investment in innovation, allowing businesses to claim tax relief on eligible activities and qualifying research and development expenditure. The scheme means businesses can claim relief reducing their Corporation Tax liability, or, in some circumstances, receive a cash payment from HMRC.

The report shows that there was a 22% increase in R&D claims for 2015/16 year ends, compared to those the year prior. Final numbers for 2016/17 have not yet been released as submissions to the scheme are still open, with R&D claimants able to claim relief on the previous two tax years, but figures indicate that this upward trend will continue.

The amount of tax relief received has also increased, with the average claim for 16/17 currently standing at £53,876 compared to £47,249 in 2015/16.

Since its launch, more than 240,000 claims have been made and £21.4bn in tax relief has been claimed via the R&D scheme.

The figures show that it is SMEs who are primarily responsible for the increase, with small and medium sized businesses making up 36,820 of the 43,040 claims for 2015/16. SMEs were given further encouragement in 2012, when the government removed the minimum R&D expenditure rate of £10,000, meaning more companies are eligible for relief.

Despite the increase in claims, we still speak to businesses who remain unaware of the scheme, or incorrectly believe that they’re not eligible for support.

Whilst it’s great news that the uptake in R&D is increasing, many business owners mistakenly associate R&D with IT and the scientific industries, but lots of companies take part in qualifying activities without realising it. By supporting SMEs, our qualified R&D tax advisers are making sure that these smaller companies are claiming everything they’re entitled to.

Findings show that the leading industries for claims are Manufacturing, Professional, Scientific & Technical, and Information & Communication. However, claims were made across a range of sectors including Agriculture, Construction, Transport and Education. The report can be read in full here.

Champion Accountants has so far helped SMEs across the North West claim more than £21m in R&D relief – with a 100 per cent success rate.

To see what you could claim, contact David Herd on: E: david.herd@championgroup.co.uk

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