Good news for SMEs as R&D Tax Credit claims soar... but could they do better?
The latest figures published by HMRC (HM Revenue and Customs) are showing a further substantial rise in the number of R&D Tax Credit claims for SMEs during the financial year 2013-2014. Whilst we considered taking the glory for the entire £200million increase in claims we did have to concede that it would have been quite a feat to achieve single-handedly, even for our R&D Tax Credit supremo, Stephen Bunting.
These are the facts...
- According to HMRC the number of R&D Tax Credit claims from SMEs increased by 23% over the previous 12 month period.
- 16,160 SMEs claimed £800 million of tax relief.
- The largest number of claims were made by companies who have their registered office in the South-East with 2,970 followed by London with 2,785.
- London was the top area in terms of the value of R&D Tax Credit with £215 million claimed, followed by the South East with £150 million.
- The East of England ranked fourth for the number of claims made, with 1,635 and third for the value of claims with £85 million.
- Manufacturing topped the industry sector table* for SMEs with 4,690 claims with a value of £205 million.
- The Information and Communications sector was top for value, with £250 million being claimed from 4,345 claims.
- The Professional, Scientific and Technical sector accounted for 3,015 claims with a value of £180 million.
The increase in uptake of the scheme for SMEs is impressive however this really is the tip of the iceberg. We firmly believe there is a long way to go before all of those companies who are eligible for R&D Tax Credit relief become a statistic in this annual report from HMRC.
Let's take Haverhill as an example:-
According to published information from Companies House there are a total of 1183 businesses in Haverhill. The majority of which meet the definition of an SME for the purpose of R&D Tax Credit (i.e. under 500 employees and either an annual turnover not exceeding €100 million or a balance sheet not exceeding €86 million.)
Since we established Fiscale in February 2014 we have successfully completed R&D Tax Credit claims for 14 companies based in the town, not even 1% of the total number of businesses that are located here. We do acknowledge that not all of the remaining 1169 companies will be undertaking research and development however...
Given that Manufacturing and Professional, Scientific and Technical Services feature in the top 5 industry sectors in Haverhill we are confident that there are dozens more local businesses who could be enjoying the benefits of what is effectively free money from HMRC.
In just over 18 months we have secured in excess of £2 million of R&D Tax Credit relief for our clients, with an average claim value of £45,000.
Our clients come in all shapes and sizes, starting with micro businesses, with a turnover of under £100,000. Based across the East of England they represent the manufacturing, software development, professional services, engineering, food processing and technology, electronics and agriculture sectors. Take a look at our case studies to read in more detail about the type of local businesses we have helped.
Many of these clients did not believe that they were eligible for R&D Tax Credit, some didn't even realise that what they were doing was R&D. In our experience around 80% of the businesses that we have a conversation with are eligible for R&D Tax Credit.
We are on a mission to raise awareness, and understanding, of the R&D Tax Credit scheme. We want to ensure that when the next annual report on R&D Tax Credits is published in August 2016 the East of England is showing a further increase in both the number and value of the claims made over the previous period.
It could be you...
Would you like to find out if you are eligible to join the growing number of SMEs benefiting from the R&D Tax Credit scheme?
Simply call 01440 708333 and our friendly team will be happy to talk to you.
Our services are offered on a no win, no fee basis.