Companies in the south west may be missing out on Research & Development (R&D) Tax Credits. Marketa Pasova from Bishop Fleming highlights this valuable alternative funding source for innovative companies.
In the 2018 Budget, the UK government reiterated its vision of an economy driven by research and innovation aiming to raise investment in R&D to 2.4% of GDP by 2027 and to make the UK the most competitive tax jurisdiction in the G20. R&D tax credits are a key part of these ambitions.
R&D tax credits are tax reliefs available to companies of any size which allow them to recover up to a third of their investment in innovation. There are different rates of R&D relief depending on the company’s size, the nature of other funding such as grants and who owns the IP. The relief is granted either as a reduction in corporation tax or as a cash payment.
Recent statistics show a sharp increase in R&D tax credit claims made by SMEs but out of 39,475 claims in 2016-17, resulting in £3.4 billion of tax savings, only 3,100 claims, worth just £180 million, were made by south west businesses.
Many businesses simply do not realise that they are eligible to claim. The credits are not just for work done in labs by people in white coats but any company investing in developing and improving their products, services or processes should consider whether they can benefit from this valuable funding source.
Bishop Fleming is one of the UK’s leading R&D tax credit advisors, not only claiming substantial sums for our clients but also engaging with and advising HMRC and the Treasury on tax policy in this area.
[This article first appeared on Business Cornwall]