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Latest R&D tax credits and Patent Box statistics are out

Posted on Wednesday 30 September 2020 by Luke Hamm | Chief Executive Officer

The latest Research and Development Tax Credits and Patent Box statistics have been released today by HMRC. It’s encouraging to see a year-on-year increase in claims for R&D tax relief but once again, the growth in Patent Box is woefully behind. More businesses are using the R&D scheme, which is great. However, overall business investment in innovation has only seen a marginal increase.

Championing Innovation

Our recent research says that 85% of SMEs think innovation is key to the economy’s recovery from Covid-19 (but only 15% think the Government is doing enough to encourage innovation). We must not be lulled into a false sense of security – more R&D tax claims does not necessarily mean more innovation is happening as there was only an 8% increase in R&D expenditure identified.

If we don’t start seeing business spending on innovation rise in line with R&D claims, we risk the effectiveness of the scheme being called into question.

Leveraging Intellectual Property

Patent Box is equally important and there should be an intrinsic correlation between IP and R&D. £5.3bn was claimed in R&D tax credits in 2017-18, but only £1.1m was claimed under the Patent Box scheme, predominantly going to large pharmaceutical companies. Businesses are just not leveraging their intellectual property as an asset. Our research shows 83% of SMEs see the importance of commercialising IP, yet only 24% think this is the main point of a patent.

We are not seeing enough new patent applications in this country. This is a huge source of untapped funding for UK SMEs and could hold the key to building back better after Covid-19.

GovGrant Rewarding Innovation

About Luke Hamm | Chief Executive Officer

Joining GovGrant in 2017 as Commercial Director, Luke now brings his passion for client delivery to the role of CEO. He ensures that GovGrant is taking its place as the UK’s largest specialist provider of IP services and R&D tax relief, helping our clients commercialise innovation. View profile