Are Scottish businesses missing out when it comes to R&D tax incentives?

Posted on Friday 21 August 2020 by Derek Granger | Scottish Regional Development Manager

In the UK companies are able to claim tax relief for their R&D activity. This government scheme is designed to boost innovation by supporting businesses that seek to improve or overcome challenges or uncertainties in their products and processes. We know that businesses in Scotland have a proud tradition of innovation and invention but are Scottish businesses being awarded the tax benefit they are entitled to?

Statistics from HMRC last year suggested that they could have been missing out. Now more than ever the entrepreneurial Scottish spirit shines through in the face of Covid-19. And at this time the financial benefit of claiming R&D tax credits is more important than ever. If you are a company that can take the R&D tax benefit as cash, it could be a vital cash injection.

Is Scotland under represented?

Regional analysis of number and value of SME R&D tax credit claims, 2017- 18 show that SMEs registered in Scotland made 1,735 claims with a combined value of £95 million. This means that the average claim for SMEs in Scotland is £54,755. Clearly a significant amount of money and a welcome boost to business in Scotland.

However, R&D claims are certainly concentrated in companies with a registered office in London, the South East or the East of England. With these 3 regions making up 46% of the total number of claims.

Which businesses claim the most?

Unsurprisingly it’s Scotland’s major cities that are making the most claims. This is probably more of an indicator of registered office rather than where the innovation is taking place. City of Edinburgh – 22% of Scottish claims, Glasgow City at 18%, and Aberdeen City at 12%.

The strong sectors both in Scotland and in the UK as a whole are Professional, Scientific & Technical, Manufacturing, and Information & Communication.

Irrespective of your industry or sector, GovGrant works with Scottish companies to identify eligible activities for R&D for tax purposes. They match you with an industry, commercial, or technical expert that best suits your business best. To find out more contact Derek Granger.

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About Derek Granger | Scottish Regional Development Manager

Derek Granger | Scottish Regional Development ManagerDerek works with our Scottish clients and accounting partners to help them achieve their business goals. He champions Scottish businesses to make sure their innovation is recognised and rewarded. He is keen to get the message out there - R&D tax relief is a welcome boost to business in Scotland. View profile