R&D tax scheme: Chancellor ups incentive

All indicators currently point to the Government's R&D Tax Claim initiative being successful in focusing UK manufacturing on innovation.

Acknowledging this in his Autumn Statement, the Chancellor of the Exchequer stated that from 1st April 2015 the rate that can be claimed by SMEs against qualifying R&D expenditure will increase from 225% to 230%.

In addition, the Government will launch a consultation in January 2015 on the issues faced by smaller businesses when claiming R&D tax credits. The Government will introduce an advanced assurance scheme for small businesses making their first claim and develop new guidance for R&D tax credits.

Mark Evans, managing director of R&D Tax Claims Limited welcomed the announcements: “The additional 5% will make a significant difference to any SME undertaking R&D; this is particularly the case for the many West Midlands SME businesses that are not claiming for what is rightfully theirs,” he stated.

"It will be interesting to see the outcome of the consultation process in January as we are very aware from our own research that perceptions of the whole claim process are often misguided. The advanced assurance scheme for new claimants and revised claim guidelines will hopefully address the results of the consultation and further encourage businesses to participate."

Figures released by HMRC earlier this year in its annual 'Research and Development Tax Credit Statistics' illustrated a 30% increase in claims by SMEs over the previous year's (2011/12) figures. SMEs took up the initiative last year with 13,000 claims (up to March 2014) clawing back over £600 million in tax reclaims against corporation tax.

Out of 12 Regions (SE and London combined), the West Midlands had the fourth highest claims awarded with 1,090 claims and £35 million claimed. Mr Evans believes the figures, although encouraging from a West Midlands position, are just scratching the surface with up to 90% of eligible companies not claiming back what is due to them.

R&D Tax Claims
www.rdtaxclaims.co.uk