More UK companies are claiming research and development tax credits, but too many innovators are still unaware of the opportunity.
HMRC’s latest statistics revealed that the number of SMEs claiming the credits rose to 18,630 in 2014/15, an increase of 16% on the previous year. But Sue Nelson, CEO of R&D tax relief consultants Breakthrough Funding, believes more needs to be done to highlight the still under-used scheme.
Since R&D tax credits were introduced for SMEs in 2000, nearly £14 billion has been claimed in total. But Sue is concerned about the slow rate of uptake, with only an extra 2,625 small to medium-sized companies claiming in the last tax year.
“We’re disappointed in the small increase and we’d like to see the figure double, at least, in the coming year,” she said. “Of the 5.4 million SMEs in this country, only just over 18,000 have applied. We’re also worried that while the average claim has risen to £58,776 – a hike of 22% since 2013/14 – this may well mean that fewer micro companies are applying for this fantastic government incentive.”
Designed to encourage greater innovation spending by UK businesses, R&D tax credits can be claimed as tax relief or a cash payment.
“This is something that HMRC does really well, so it’s essential that everyone knows about it,” Sue said. “We want companies with less than 10 employees to really look at what they are doing and contact us if they think they may be eligible. We also strongly call on the government to publicise the incentive more widely, to help very small businesses.”
For more information on R&D tax credits and eligibility, visit www.breakthroughfunding.com or call us on 0800 772 0800
There is a simple initial test that businesses can take to assess whether they might qualify for ‘cash for innovation’ and it's right here. Let us know how you get on.