Caroline Hunt, Director at national audit, tax, advisory and risk firm, Crowe.
The increase in the number of businesses claiming R&D tax credits is good news for UK innovation, and is an indicator that more organisations are investing in technologies to help improve business performance.
Figures published on 27 September by HMRC reveal that in the last year the Exchequer paid out £3.5 billion in R&D cash to support UK companies. The upturn in companies claiming R&D cash also supports Crowe’s own experience with our clients, who are increasingly keen to explore whether they might be able to claim R&D cash.
Given the majority of those companies using R&D tax credits are small and medium-sized enterprises (SMEs), the uptake in the relief’s use could encourage many innovative businesses to grow and expand and reach their full potential. Additionally, despite the on-going uncertainty surrounding Brexit continuing to impact on business planning, the figures show that more organisations are willing to invest and focus on what they do well. In the long-term, this should help the UK economy to thrive and could help create a flourishing business environment which will attract further outside investment.
However, while the figures are encouraging, the fact is that many more innovative businesses in the UK could be making more of the relief, yet are not currently doing so. Whether the generally low uptake relates to a lack of understanding of the relief, or there are concerns over whether the business activities qualifiy, specialist advice can help to determine those eligible businesses and projects which stand to gain significant repayments for investment.