R&D Tax Relief – Update

HM Revenue & customs (HMRC) has recently published its annual statistics for company claims for Research & Development (R&D) tax relief claims.

There continues to be an increased uptake in claiming the generous relief, partly as the relief becomes even more generous and partly as more and more companies become aware of the relief for the first time.

The data is for the 2012/13 financial year. The headline statistics are: ◾Since its introduction in 2000 over 100,000 claims have been made by over 35,500 different companies claiming in excess of £9.5 billion in tax relief ◾15,930 claims were made in 2012-13, an increase of 26% over the previous year; qualifying costs within the claims totalled £13.2 billion, 10% higher than the previous year ◾“Manufacturing”, “Professional, Scientific and Technical” and “Information and Communication” sectors accounted for 77.1% of the claims and 80% of the total amount claimed (sector data based on SIC2007 coding for claimant company) ◾8,740 claims by Small and Medium Sized Enterprises (SMEs) (being a very generous definition of such for this purpose) reduced their tax bills whereas a further 1,220 SMEs claimed payable credit (cash back) as they were loss making. 3,050 SMEs made a claim for a combination of tax deduction and cash back ◾Although SMEs make up the greater number of claims, 80% of expenditure claimed was made by large companies (£10.6 billion compared to £2.6 billion for SMEs) ◾580 SME companies claimed under the large scheme as sub-contractors to large company R&D ◾545 claims were made in the North East of England, 1,545 in the North West of England, 1,065 in Yorkshire and Humber and 905 in Scotland, claiming £25m, £85m, £45m and £45m respectively. Over 40% of claims are made by companies in London and the South East. (region data based on registered office)

What’s stopping you making a claim?

There are still many companies failing to make claims for various reasons. Our experience shows that generally business owners, like yourself, usually think that some or all of the following apply: ◾We are not doing R&D – many companies do not initially realise that their project qualifies as R&D ◾Claiming the relief is complicated – not if you seek good advice ◾The costs of claiming outweigh the benefits – this is rarely the case and our charges are structured based on the tax savings generated ◾We cannot separately identify costs – HMRC does not expect you to reinvent your accounting records to make a claim and will accept some elements of estimation ◾We’ve received a grant towards R&D or capital expenditure, therefore we can’ have the tax relief too – this is by far the biggest misconception. The receipt of a grant may affect how much additional tax relief the company can claim but you can have both!

What tax relief is available?

The three tax reliefs for innovative companies are very generous and are: 1.R&D tax relief as above. 125% additional relief on costs for SMEs, 30% for large companies or SMEs with grant funding or subcontractors to large companies. New Research & Development Expenditure Credit (RDEC) for large companies to allow for payable credit as an alternative to the 30% relief 2.Patent Box – an effective 10% rate of Corporation Tax on relevant profits from patents 3.100% capital allowances for assets acquired, including buildings, used in R&D

How Pierce can help you

We have many years’ experience preparing R&D claims for a range of businesses. We have a 100% record with HMRC – none of our claims have been reduced or rejected by HMRC. In the previous 12 months we have secured R&D tax refunds in excess of £500,000 for our clients. We can also help you claim R&D tax refunds for previous tax years if you haven’t previously made a claim. We offer a free no obligation review of your business activities to identify any R&D tax planning opportunities for you. Contact either Ben Smith or Tom Wilkinson by phone on 01254 688100 to find out more.

Enjoyed this? Read more from Pierce CA Ltd

Latest news

1

Blackpool approves plans for pair of apartment complexes New South Promenade Apartments Visuals

Blackpool approves plans for pair of apartment complexes

12 Apr 2024

2

Distinguished engineer takes senior role at Lancaster University Rebecca Lingwood

Distinguished engineer takes senior role at Lancaster University

11 Apr 2024

3

International building supplies firm to open new plant in Preston New Kerakoll Group Premises Visuals

International building supplies firm to open new plant in Preston

11 Apr 2024

4

Case Study: RfM Transform and Belgravia Décor HR Trends from RfM Transform (13).png.png

Case Study: RfM Transform and Belgravia Décor

12 Apr 2024

5

Lustalux helps with the £21m refurbishment of Printworks Manchester pw-sign-manchester.jpg.jpg

Lustalux helps with the £21m refurbishment of Printworks Manchester

12 Apr 2024

Hwc 2024 Email Signature 980x120
Background image for hub sign up block

LBV Hub

Reach 50,000 members of the Lancashire business community

Post your news
Post your events
Post your offers
Company profile
Social reach
Magazine coverage
Sign-up
Events
Health and Wellbeing Conference 2024
Hwc 2024 Social Media 1200px 1
Networking
23 Apr 2024

Health and Wellbeing Conference 2024

Crow Wood Hotel, Burnley , BB12 0RT

08:30 - 13:00

Business Networking in Preston- BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
12 Apr 2024

Business Networking in Preston- BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

Business Networking in Blackburn - BNI Infinity
EVENT LISTING BNI Infinity.png.png
LBV Hub Networking
12 Apr 2024

Business Networking in Blackburn - BNI Infinity

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:30 - 08:30

Help to Grow Management Course
HTG2.png.png
LBV Hub Seminars
15 Apr 2024 - 17 Jul 2024

Help to Grow Management Course

Preston Campus , Preston , PR1 2HE

09:30 - 14:00

Business Networking in Chorley - BNI Endeavour
EVENT LISTING SIZING Endeavour.png.png
LBV Hub Networking
16 Apr 2024

Business Networking in Chorley - BNI Endeavour

Oak Royal, Bury Lane, Chorley, PR6 8SW

06:30 - 08:30

Business Networking in Blackburn - BNI Vista
EVENT LISTING SIZING Vista.png.png
LBV Hub Networking
16 Apr 2024

Business Networking in Blackburn - BNI Vista

Hampton by Hilton, 2 Frontier Ave, Blackburn, BB1 3AL

06:45 - 08:30

Business Networking in Accrington - BNI Zeus
EVENT LISTING SIZING Zeus.png.png
LBV Hub Networking
17 Apr 2024

Business Networking in Accrington - BNI Zeus

The Mill House, Corn Mill Yard, Accrington, BB5 5HX

06:45 - 08:30

Business Networking in Lancaster - Eden Business Network
EVENT LISTING Eden Business Network.png.png
LBV Hub Networking
17 Apr 2024

Business Networking in Lancaster - Eden Business Network

The Borough, 3 Dalton Square, Lancaster, LA1 1PP

18:30 - 20:30

Business Networking in Preston - BNI Diamond
EVENT LISTING BNI Diamond.png.png
LBV Hub Networking
17 Apr 2024

Business Networking in Preston - BNI Diamond

The Marriot Hotel, Garstang Road, Broughton, PR3 5JB

07:15 - 09:00

Cyber Secure 360: Safeguarding Your Digital World
CyberSecure 360 LBV-32.png.png
LBV Hub Seminars
18 Apr 2024 - 18 Apr 2024

Cyber Secure 360: Safeguarding Your Digital World

Accrington Stanley, Accrington, BB5 5BX

08:30 - 12:00

Business Networking in Burnley - BNI Kudos
EVENT LISTING BNI Kudos.png.png
LBV Hub Networking
18 Apr 2024

Business Networking in Burnley - BNI Kudos

Prairie Sports Village, Windemere Avenue, Burnley, BB10 2FU

06:45 - 08:30

Business Networking in Preston- BNI Brunch
EVENT LISTING SIZING Brunch .png.png
LBV Hub Networking
19 Apr 2024

Business Networking in Preston- BNI Brunch

Samlesbury Preston Hotel, Preston New Road, Preston, PR5 0UL

09:30 - 11:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv115 Online Graphic
Subscribe now

Weekly news bulletin