Over £3billion R&D tax relief was claimed in the 2015-16 tax year alone. The total number of R&D tax relief claims and the amount claimed has continued to rise each year since the scheme was introduced.
We recently posted an article on HMRC’s Research and Development Tax Credits Statistics for 2017. These covered the 3 years to 31st March 2016 and gave us some interesting reading.
In each of those years, there has been a clear increase in the total number of R&D claims and the actual amount claimed. All positive news of the UK’s R&D future, but we wanted to look at the data more closely to see if it would provide insight into differences by geography and industry.
R&D claims by Industry
The manufacturing and information and communication industries have provided the largest number of claims with over 53% in 2015-16. However, numerous other industries have over the years been gradually catching up.
Whilst the actual number of claims being made in the manufacturing industry has increased, their proportion of claims decreased by 5% since 2013-14. That 5% has been filled by all manner of industries, for example, the arts, entertainment and recreation.
This might be an indication of other industries learning how R&D applies to their workplace and being in a better position to take advantage of the scheme. We are certainly finding that clients come to us with a better understanding of the scheme.
R&D claims by region
London is still the leading region by the number of claims at 19%, closely followed by the South East at 17%. However, the value being claimed in these regions has dropped over the past three years.
London’s share of the total claim value being awarded was 31% in 2013-14 but decreased to 28% in 2015-16. Could this be the “Northern Powerhouse” our previous Chancellor of the Exchequer, George Osborne introduced?
We have many clients in Scotland and here statistics show a surge in R&D. Although the proportion of claims being made has remained constant over the three years at 5%, their share of the value increased from 3% to 6%. In cash terms, the actual increase has been from £55million to £165million in benefits received.
Closer to our home in the Midlands, the proportion of claims and value received has remained consistent. But again, the actual figures show increases.
Over the three years studied the annual number of claims being submitted in the Midlands increased from 2,730 to 3,760 and the money being claimed has jumped from £220million to £360million each year.
R&D Trends in the Future
It will be interesting to see if these trends continue into the year ended 31st March 2017 and beyond.
The impact from Brexit has yet to be seen. However, utilising the tax reliefs available to you like the R&D relief scheme will be more important than ever to increase competitiveness in an ever-changing marketplace.
If you're interested in finding out how much you could claim, check out our free R&D calculator, giving you an instant estimate.
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