Companies submitted 39,960 claims for research and development (R&D) tax credits in 2016/17, up from 26,255 in 2015/16, according to latest HMRC figures. The relief claimed amounted to around £3.5bn, an increase of £575m on the previous year. This corresponds to £24.9bn of R&D expenditure.
The manufacturing, professional, scientific and technical and information and communications sectors produced the majority of claims (71%), representing 75% of the relief sought in 2016/17.
Jenny Tragner, director at R&D tax credit consultancy ForrestBrown said awareness of R&D tax incentives had increased substantially as a result of HMRC’s campaigning. She was particularly encouraged by the rise in SMEs claiming R&D tax reliefs. ‘This is brilliant news for the economy, given that we know the purpose of R&D tax credits is to promote private sector innovation and investment in science, technology, engineering and mathematics jobs’, Tragner commented.
However, Tragner noted that more than 75% of claims made were worth less than £50,000, making her concerned that ‘some businesses may not be getting the full value that they deserve’.
Jenny Tragner urged businesses to review their claim each year. ‘As a first-time claimant, it is not always easy to identify all of your relevant activities and costs. Getting your claim right is important as an SME as many use the benefit they receive as a vital source of funding to further grow their business.’
James Tetley, partner and national head of R&D at RSM, had seen a ‘significant backlog in claims being processed. In some cases, this is up to six months’. This was ‘disappointing’, Tetley commented, given HMRC’s R&D units were taking a collaborative approach to working with R&D advisers.
Mark Tighe, CEO of tax relief specialists Catax, said: ‘The government is aware that Britain has a global reputation for innovation and so is actively trying to encourage firms of all sizes to invest in R&D. The importance of exporting innovative tech, pharma, engineering and manufacturing cannot be overstated in the current climate.’
Companies submitted 39,960 claims for research and development (R&D) tax credits in 2016/17, up from 26,255 in 2015/16, according to latest HMRC figures. The relief claimed amounted to around £3.5bn, an increase of £575m on the previous year. This corresponds to £24.9bn of R&D expenditure.
The manufacturing, professional, scientific and technical and information and communications sectors produced the majority of claims (71%), representing 75% of the relief sought in 2016/17.
Jenny Tragner, director at R&D tax credit consultancy ForrestBrown said awareness of R&D tax incentives had increased substantially as a result of HMRC’s campaigning. She was particularly encouraged by the rise in SMEs claiming R&D tax reliefs. ‘This is brilliant news for the economy, given that we know the purpose of R&D tax credits is to promote private sector innovation and investment in science, technology, engineering and mathematics jobs’, Tragner commented.
However, Tragner noted that more than 75% of claims made were worth less than £50,000, making her concerned that ‘some businesses may not be getting the full value that they deserve’.
Jenny Tragner urged businesses to review their claim each year. ‘As a first-time claimant, it is not always easy to identify all of your relevant activities and costs. Getting your claim right is important as an SME as many use the benefit they receive as a vital source of funding to further grow their business.’
James Tetley, partner and national head of R&D at RSM, had seen a ‘significant backlog in claims being processed. In some cases, this is up to six months’. This was ‘disappointing’, Tetley commented, given HMRC’s R&D units were taking a collaborative approach to working with R&D advisers.
Mark Tighe, CEO of tax relief specialists Catax, said: ‘The government is aware that Britain has a global reputation for innovation and so is actively trying to encourage firms of all sizes to invest in R&D. The importance of exporting innovative tech, pharma, engineering and manufacturing cannot be overstated in the current climate.’
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