According to recent figures published by HM Revenue & Customs (HMRC), British businesses invested nearly ￡22 billion in undertaking research and development (R&D) last year, an increase of 31 per cent from their outlay 12 months earlier.
The figures show that the ￡21.8 billion of research spending was helped by ￡2.45 billon of tax credits designed to boost ambitious smaller companies. The number of claims for tax credits reached its highest level since the scheme began in 2000-01, rising to 22,445 in 2014-15.
A further survey of 247 UK business leaders found that the uptake of the government’s R&D tax credit incentive is set to double in the next three years. Of those businesses which had claimed tax credits, 40 per cent we able to increase R&D activity as a result, 60 per cent maintained R&D activity at a consistent level, 62 per cent we able to recruit new staff members, and 24 per cent reinvested the money into setting up new offices, undertaking further manufacturing processes or developing new products.
In an attempt to further reassure businesses and encourage innovation, the UK Chancellor Philip Hammond said last month that “British businesses and universities will have certainty over future funding and should continue to bid for competitive EU funds while the UK remains a member of the EU.
“We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive,” he continued.
In response to this, the director of the Campaign for Science and Engineering (CaSE) in London, Sarah Main, said the commitment “provided much-needed reassurance to researchers in the UK and across Europe that the UK is still in the game as a reliable player in research funding bids.”
The recent statistics clearly indicate that R&D tax credits are encouraging businesses to innovate and progress. What is clear, however, is that a lack of awareness and understanding could be preventing SMEs from claiming.
Having helped many businesses across a variety of sectors make significant claims when some were previously unaware they could, we know first hand how important the R&D tax credit scheme is in encouraging innovation and increased spending on R&D activities by companies operating in the UK.
Whilst the rules can be complex, our Beavis Morgan team of R&D experts can maximise the value of any potential claim. Speak to us today to set the benefits in motion. Our proven methodology offers a painless approach towards obtaining R&D tax credits.
Contact Steve Govey or your usual Beavis Morgan Partner.
R&D Tax Credits – Why thousands of businesses are missing out