The government is giving more of a boost than ever before to the UK’s most innovative companies, according to the latest full-year statistics from HMRC.
Figures released on 27 September showed:
- More than 43,000 businesses claimed tax credits for research and development in 2015-16 (ii), up 22% on the previous year.
- The total amount of R&D support claimed increased by 25% to £3.7bn.
- 75% of claims are under £50,000
- The average claim to date is £53,000
However, tax specialist GovGrant, which helps UK companies maximise the funding opportunities through innovation tax incentives when they are investing in R&D and Intellectual Property, said too many green energy businesses were still not aware of the tax relief scheme or have significantly under-claimed.
The greatest volume of claims continued to come from three sectors – Manufacturing; Professional, Scientific and Technical; and Information and Communication – which accounted for 71% of claims and 75% of the total amount claimed.
Only 65 companies in the electricity, gas, steam and air conditioning sector made claims under the scheme, receiving an average of £153,000 and a total for the sector of just £10m.
Regionally, companies making claims are concentrated in London, the South East and the East of England.
Whilst statistics for the 2016-17 tax year are not yet finalised, the numbers so far indicate a continued upward trend in the number of claims from innovative businesses. There has been a significant increase 16% of companies making a claim for the first time in 2016 and that trend will undoubtedly continue.
Since the scheme began, there have been 240,000 claims totaling £21.4bn.
Luke Hamm, CEO of GovGrant, said: “It’s great that the government is doing more than ever and the numbers are up – it’s good news for the UK economy.
“But too many businesses still don’t know what they’re entitled to so there’s a need for much more education. With Brexit on the Horizon, it is imperative that the household names globally recognise the UK as a destination of choice for innovation.
“Whilst the volume has increased rapidly, as most claims are now relatively small the government needs to consider if the support is enough to truly stimulate innovation as a key driver in the UK economy.”