Nearly 40,000 claims were made for R&D tax credits in the UK in 2018, almost double the amount in the previous year, which is why Stoke and Leek accountants Thompson Wright believe more businesses could stand to benefit from the tax relief on offer.
Almost £3.5 billion was claimed from business, both large and small, via R&D (research and development) tax credit during the last tax year, which helped contribute towards £24.9 billion of R&D expenditure across the nation.
However, the Government’s data shows that a large majority of the businesses that claimed were based in London and the South East.
Sarah Bowen, Tax Director at Thompson Wright, said: “Business in Stoke, Leek and across the Midlands could really benefit from the funding that R&D tax credits can offer.
“We believe there is a perception that only the largest businesses or projects can make use of the relief or that only the leading technology companies can benefit, but this couldn’t be further from the truth.”
She pointed out that the Small and medium-sized enterprises (SME) R&D Relief, available to business with fewer than 500 members of staff or a turnover below £87 million can deduct an extra 130 per cent of their qualifying R&D costs from their yearly profit, as well as the normal 100 per cent deduction, to make a total 230 per cent deduction – which equates to roughly 33p for every £1 spent on R&D.
“In order for a project to be eligible for R&D relief it must have looked for an advance in science and technology, had to or tried to overcome uncertainty and be an advance that couldn’t be easily worked out by a professional in the field, which covers a wide range of innovations and procedures conducted during the R&D process,” explained Sarah.
“To help businesses make the most of this assistance, accountants such as ourselves can seek advanced assurance that the project will be eligible from HM Revenue & Customs, ensuring that businesses can invest safely in the knowledge that they will benefit from this relief.”
Thompson Wright believes that there are potentially thousands of businesses in and around Stoke who are either unaware of R&D tax credits, or who, for whatever reason, do not believe they are eligible.
“With such a generous tax relief on offer businesses can’t afford to miss out on this opportunity and should seek advice as soon as they can,” added Sarah.
To find out more about Thompson Wright’s expertise in this area, please contact us.