By David Manning - Manager, Blockchain & Crypto Team While the title might seem dramatic, it is certainly the sentiment you will find across the array…
HMRC has recently released research and development (R&D) tax relief statistics which show the South West are outperforming the national picture. Across the UK the value of claims grew by 14% from 2015/16 to a total of £4.4bn in 2016/17. The South West grew by 28% over the same period to £230m. It also looks as though the region will continue to show strong growth in 2017/18 with current figures only £5m behind the previous year with three more months available to claim in this period.
So what does this actually mean to a business? The Government regards investment in R&D as crucial to economic success and R&D tax relief is designed as an incentive for UK companies to invest in innovation. The relief can be extremely generous and enables the company to accelerate its R&D programme and invest a greater proportion of its profits into such things as hiring new staff or investing in new machinery.
Across the country claims are dominated by the manufacturing, information and communication and scientific sectors, accounting for 68% of the total number of claims and 73% of the total amount claimed. The real growth sectors outside of these include construction which has grown 44% from the previous year.
Since the scheme was first launched in 2000 over 300,000 claims have been made and £26.9bn of tax relief has been claimed.
Stuart Rogers, head of innovation at PKF Francis Clark commented “It is fantastic news that the South West is outperforming national growth of this valuable tax relief. Whilst manufacturing and technology businesses also dominate claims across our client base, we see huge opportunities for clients in other sectors including agribusiness, marine, construction and food & drink – all of which are major areas of sector expertise for PKF Francis Clark.
“The biggest challenge that we face is that a lot of businesses don’t believe it would apply to them but you would really be surprised! We help a lot of businesses of all sizes realise that they can claim for R&D. As a firm we are committed to supporting our clients to make sure that we maximise relief value, providing a significant cash flow boost.”
PKF Francis Clark is a firm of chartered accountants and business advisers, with eight offices throughout the South West.