R&D Tax Relief Claims by Manufacturing Companies Increase by 10% : The latest statistics from HMRC have shown a 10% year on year rise in the amount of claims for research and development tax credits submitted by manufacturing companies in 2014-15.
The new data shows that manufacturing firms submitted nearly 6,345 claims for research and development tax credits in 2014-15, which is an increase from 5,815 in the previous year. The total amounts claimed in the period increased from £635 million to £770 million, which is a rise of more than 20%.
R&D tax credits were first introduced in 2000 and are designed as a tax relief to encourage more R&D spending and innovation.
They work by reducing a companyâs tax bill by a further amount depending on the companyâs allowable R&D expenditure.
Since its launch, more than 140,000 claims have been made, with nearly £14 billion claimed in tax relief.
Over time, the rate of belief has become more generous and is now worth up to 230% for SMEs, which means that for each £100 of qualifying costs, the corporation tax paid by SMEs on income could be cut by a further £23.
National Lead for Manufacturing at RSM, Nick Greenwood, commented on the figures: While itâs great to see a 20 per cent increase in the amounts being claimed by manufacturing businesses, our experience on the ground is that we still see a large number of firms not taking advantage of this tax relief programme.
Often this is because businesses have investigated opportunities in the past and decided they werenât eligible. However, changes in eligibility criteria and changes in business operations may now mean they can qualify.
Greenwood added that manufacturing companies should regularly review their activities and examine their eligibility. This can be by challenging pre-conceptions that the business is not âdoingâ R&D, or that the value of the R&D expenditure is too low to warrant a claim.
Manufacturing & Engineering Magazine | The Home of Manufacturing Industry News
