IN BUSINESS Firms missing out on R&D tax relief credit
RESEARCH and development tax advisors have warned that tech businesses in Runcorn and Widnes and the wider Liverpool City Region could be missing on millions of pounds of R&D relief savings every year.
Jumpstart said that despite a rise of 27% in the total R&D tax credits claimed in 2014-15, analysis of the HMRC figures for 2015 showed that companies in the North West accounted for just 9.9% of total claims and 5.9% of the total tax benefits claimed.
Of 2,200 claims, 1,865 were from the small and medium sized enterprises R&D scheme and the rest were for large company schemes.
London and the South East made the highest number of claims in the year. Companies in the capital accounted for 19.1% of all claims and 32.7% of the total tax relief claimed, while the South East of England accounted for 17.9% of claims and 18.5% of the total claimed.
The figures showed a concentration of claims in the ‘manufacturing’, ‘professional, scientific and technical’, and ‘information and communication’ sectors around the UK. ●
Russell McGrath, Jumpstart client engagement manager, said: “Whilst it’s encouraging to see many local companies availing of the R&D tax credits scheme, these latest HMRC figures are an alarming demonstration of just how much companies from the region are losing out in terms of tax savings compared to companies throughout the rest of the UK.
“Of the 22,445 claims across the UK totalling £2.45bn in tax benefits, only 2,200 claims came from companies in the North West and resulted in just £130m back.”
Mr McGrath added: “Whilst uptake of the UK Government’s R&D tax relief scheme is increasing across the UK as a whole and is very healthy in certain regions, companies from the Liverpool City Region and wider North West area are clearly not reaping the full benefits of the scheme.
“Furthermore, local companies could be under claiming or over claiming because their technical project activities and expenditures are not being accurately interpreted against legislation.
“As well as the introduction of increased scrutiny over such claims by HMRC, the process of claiming is very much a technical assessment, so it is important that companies instruct a specialist advisor to handle this for them.
“There is huge scope for a much more focused uptake by companies from the Liverpool City Region, Cheshire and wider North West.”