HMRC has released the latest statistics for the value of Research and Development Tax Credits covering 2018-19 so far, and with £5.3 billion claimed already, it highlights the biggest boost to innovative UK companies yet.
To date, an impressive £33.3bn has been claimed in R&D tax relief overall, and there’s no sign of the continued rise in claims slowing down anytime soon.
As of June 2020, there have been 59,265 R&D tax credit claims for 2018-19 so far – a jump from the previous year. With 52,160 claims already secured for SMEs, it’s fantastic news that forward-thinking companies continue to benefit hugely from the R&D scheme (this is also only based on partial data for the year, so a further increase is expected as more relief is received).
The Manufacturing, Professional, Scientific and Technical, and Information and Communication sectors once again have the greatest volume of claims (a total of 66% of claims and 71% of the total value claimed).
Although it’s clear the R&D scheme is thriving, it’s also worth highlighting that there are still not nearly enough new patent applications in the UK. With only £992 million claimed under the Patent Box scheme, the new figures indicate this funding is still largely untapped for UK SMEs.
Qualifying for R&D tax credits can be a pretty good indicator of eligibility for a Patent Box claim. So why aren’t businesses capitalising on their innovation through an Intellectual Property strategy or a patent? Reasons vary, but unawareness of the Patent Box scheme, perceived complexity of legal processes regarding a patent, or misconceptions that patents are about protection and not value creation could explain the fewer number of claims.
Having endured the incredibly challenging climate of Covid-19 throughout 2020, leveraging intellectual property as an asset could both be a hugely useful tool for businesses navigating the best way to get back on their feet. The same can be said for R&D tax credits. With the average R&D claim value for SMEs is worth £40,556, there’s a lot to gain for UK businesses; and there’s also still time to make a claim for any R&D activities covering 2018-19.
At TS Partners, our team of tax specialists help our clients year in year out get the most out of their business through various tax relief opportunities. Once businesses are made aware of the potential to claim for eligible expenditure and receive valuable relief, there’s often no turning back.
If you’d like further information on how TS Partners can help you through the claims process for either R&D Tax Credits or the Patent Box scheme, or you’ve got questions about your eligibility, get in touch with our tax team.
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