The figures show that of the 22,445 R&D incentive claims made in 2014-2015, 2,220 were from the East of England region, representing 10 per cent of the total. Total claims were valued at £250 million, up on previous figures, taking a large share of the £2.45 billion of government support claimed by businesses across the country.
London and the South East is leading the country in promoting innovation in the UK economy with 8,235 claims made in the period representing 37 per cent of the total. The North West was ranked third.
David Taylor, R&D specialist at KPMG in the East of England said: “R&D tax relief claims have grown steadily over the years and clearly demonstrate the region’s strength and pedigree in R&D. It is great to see so many businesses taking advantage of the Government tax incentives available, especially when they tell us that they have invested the cash in additional R&D efforts to drive their business forward.
“The advantage of R&D incentives is that they are designed to benefit all businesses, regardless of industry, and the criteria apply to more activities than many people realise. Quite simply, you don’t have to be wearing a lab coat to qualify. However, whilst the figures show that there are significant and valuable benefits being claimed, there are still many businesses locally however, that are not benefiting from the reliefs on offer. It is estimated that only two thirds of the available R&D incentives are claimed.”
Across the country, manufacturing continues to lead the way with 6,345 claims during the period, valued at £770 million, followed by the information and communication sector with 5,165 claims (£385 million) and professional, scientific and technical sector with 4,065 claims (£525 million).
David continued: “The UK Government is increasingly using reliefs and incentives to promote the UK economy through the likes of the R&D regime, Patent Box regime and Creative Sector Reliefs. For large companies, R&D Expenditure Credit has increased to 11 per cent, while SMEs now benefit from an increased rate of relief, with the ‘Super-deduction’ increasing to 230 per cent. Coupled with the decrease in the company tax rate, there is no better time than the present for businesses to benefit from reliefs to invest and grow.”
What you might not know about R&D tax credits
- For every £100 of qualifying R&D expenditure, there is up to £33.35 of relief available for SMEs and £8.80 for ‘Large’ businesses.
- Any company, in any sector, could be eligible if investing in or developing technological capabilities.
- The relief applies a broad definition on SMEs – companies with fewer than 500 employees and €100million turnover qualify for SME status.
- A company has two years after the end of the relevant accounting period to make a claim.
- R&D claims impact the tax paid by a company, group companies and joint ventures in the prior, current and future periods, so it is important to get a clear picture of the implications of using these reliefs.
- The Government is actively encouraging companies to make R&D tax relief claims, so don’t be intimidated by the claims process.
- There is no minimum level of qualifying R&D costs required.
- KPMG runs its own self-assessment tool at www.kpmgrd.co.uk
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Emma Murray
Communications Manager KPMG
emma.murray@kpmg.co.uk
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