Despite the government’s ambitious target of raising research and development (R&D) investment to 2.4 per cent of GDP by 2027, it is not expected to reach this level until 26 years later in 2053.
A joint report by the CBI and Nexus shows that the UK’s R&D investment level currently lags behind other European countries such as Germany, which just last week announced an extra £17 billion boost to R&D funding in the next decade.
For UK business, this matters because the under-provision of R&D funding could stagnate growth at a time when the potential for the UK is immense.
According to the report, advanced data analytics is opening up a ‘new frontier’ for businesses to invest in R&D, which could help address this potential spending shortfall. Whilst businesses are increasingly using data as key input in their R&D, and this is opening opportunities across all sectors, it is still an underexploited asset, because businesses are facing a range of challenges, such as skills shortages and funding support.
Calling on the government to provide a ‘comprehensive roadmap’ to show how it will acheive the 2.4 per cent target, the CBI says that an increase in public funding is essential to spur growth in UK R&D investment.
Steve Govey, Head of Research & Development at Beavis Morgan comments: ”A major hurdle is getting business owners to understand the breadth and variety of activities that can qualify for R&D tax credits. The reinvestment of these funds into further development will go a long way to meeting government targets.“
R&D tax relief provides excellent incentives for UK companies to invest in innovation but, as Steve explains, the claims process itself can be complicated and convoluted, with lengthy paperwork and plenty of room for error. It is therefore essential that you seek specialist advice to ensure the risks are minimised and all aspects of the process are taken care of, thereby maximising your chances of getting all the money back owed to you.
Is your company involved in manufacturing, design or development of new processes/software or using existing processes or technology in a unique manner? If so, get in touch. Our specialist team of tax and engineering professionals has made many successful claims on behalf of our clients across a variety of sectors including software development, online gaming, manufacturing, engineering, pharmaceutical, advertising and telecommunications.
The reliefs can be extremely beneficial for those engaged in qualifying R&D, and Beavis Morgan can help your company maximise the benefits of the reliefs by:
- Determining whether you are a qualifying company
- Helping you to assess whether any of your activities qualify
- Reviewing your activities to make sure you claim all that you are entitled to
- Working closely with you to prepare and submit your claim to HM Revenue & Customs