Welsh firms ‘not claiming full R&D tax credits’

WELSH firms are underclaiming R&D tax credits compared to the country’s share of UK companies, according to new HMRC figures.

There 2,940 claims were made from businesses registered in Wales for the tax year 19/20, making up just 3.4% of the overall UKwide claims that totalled 85,900. Welsh firms make up around 5% of the UK total business population.

The amount of support for Wales claimed was £170m, making up 2.3% of the total claimed overall.

Th average value claim value across the UK was £57,000, all figures will continue to grow as the claim window for the year will remain open until March 2022.

English regions as a whole saw London and south-Eest registered companies receiving 49% of the total support given in the form of R&D tax credits for the 19/20 year, compared with the 35% of total claims made.

Leslie Maloney, tax specialist at R&D tax specialists Access2Funding said: “The key take-aways from this year’s R&D tax credit report is the two growth areas in Professional, Scientific and Technical and Information and Communication, both of which saw significant expansion in number of claims made in 2019-20.

“I personally believe this report shows opportunity for real growth for innovative businesses, particularly in those high growth sectors and a shift towards the new economy. The more traditional sectors like manufacturing and construction have been claiming R&D for many years and we expect this to continue but for Professional, scientific and technical and Information and Communication to be the main drivers of growth in helping the country to recover economically.”

On the low level of claims in Wales, Mr Maloney, said “As a comparison, in the 19/20 year, Northern Ireland, with approximately half the population of Wales, received £135m in R&D tax credits, against the £170m for Wales. It would appear that there is scope for Welsh businesses to pursue additional support for the innovation they create.”