HMRC have recently released their R&D tax credit statistics for the 2019/20 tax year.
The total value of R&D relief is now nearly £7.5 billion.
This is an encouraging sign of a growing R&D sector, and of wider knowledge and use of the scheme(s). However, with this, it appears HMRC have chosen to increase scrutiny of claims. Along with other measures such bringing back the PAYE cap on payable tax credits shows they want to crack down on dubious claims.
With talk of increased checks from HMRC, working with a specialist, such as Richardsons, can help minimise the likelihood of an enquiry.
The total value of claims in the South East region represented 16% of SME credits nationwide.
The average claim in for the area was up to 17% more than the national average which shows the significant level of research work being undertaken, something we see in the science parks in and around Oxford, where a lot of our clients are based.
Similar figures can be seen for the RDEC scheme, which is where a small company has received funding, or a large company is making a claim.
There have been significant increases in larger claims for SME schemes with 1,055 companies making a claim over £500k, up from 700.
There is also substantial growth in claims under £25k with 41,425 companies making a claim, up from 37,205. This shows continued engagement with the scheme at a lower level. Proportionally similar levels of growth have also been seen in the RDEC claims with 10% more companies making claims.
This may also include small companies making a partial claim under RDEC due to grant funding or subsidies.
At Richardsons we have seen large numbers of R&D companies being formed, particularly spin outs from universities, over the last few years, and we are hopeful that increased grant availability and knowledge of the system has helped increase the amount of R&D occurring across the country.
Overall, it is fantastic to see continued growth in the scheme and we know from working with our clients that the repayments generated by the R&D scheme are invaluable to allow companies to continue their R&D activities and support their growth.
If you think your company may qualify for an R&D claim, please get in touch for a free initial meeting.