1107 Focus Spring 2020 Print - Page 18



R&D tax credits
are we under
claiming
as a region?
by Tom Yeung
advisor
fiscale
Despite the West Midlands being a hub of
enterprise, the latest report from HMRC shows
that only 3,635 Research & Development (R&D)
Tax Credits claims were made from this region
during the 2017-18 period. With the average claim
value being £41,265. Should more companies be
claiming?
The West Midlands is renowned for its innovation,
with our manufacturing and engineering sectors
being amongst the best within the UK. Therefore,
it is staggering to think that this region represents
only 6.7 percent of all R&D Tax Credits claims.
The latest statistics released from HMRC for the
2017-18 tax year shows that the national average
value of R&D tax relief being awarded to SMEs
is £54,048. However, it is estimated that only
25 percent of eligible companies are currently
receiving the relief to which they are entitled.
This might be because many business owners are
not aware of R&D Tax Credits and how much they
might represent; or they simply think that they
don’t qualify because they don’t carry out “research
and development”. Making business owners aware
of just how valuable R&D Tax Credits can be, along
with the real and tangible impact that they can
have on a business, often leads to them making a
successful claim.
Introduced in 2000 to create an economy focused
on innovation, this tax relief specifically sets out
to encourage and reward businesses that invest in
improving their products, processes or services. In
return, businesses are able to recoup some of the
costs incurred, in fact, they could receive up to 33p
for every £1 spent.
As this is a specialised area of taxation, whilst your
accountant could help you make a claim, businesses
find that using a specialist in this area is much
more likely to maximise their claim values. They
will work with your existing accountant, to ensure
that nothing is missed and that you receive the full
amount that you are entitled to. Furthermore, they
can also advise on other incentive schemes, such as
The Patent Box, which may help to further reduce
your corporation tax rate.
Identification of whether you could be eligible to
make a claim is always the first step, as there are
many misconceptions surrounding the Tax Credits
scheme.
Fiscales' local advisor, Tom Yeung would be happy
to discuss this with you and can be reached on
tom.yeung@fiscale.com or 07792 392356
18.

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