Research and Development Tax Credit Relief: New Statistics Highlight Sectors that are Missing Out in UK Government’s Scheme
Figures released by HMRC have revealed three sectors continue to dominate and reap the majority of R&D Tax Credit benefits including ‘Manufacturing’, ‘Professional, Scientific & Technical’ and ‘Information and Communications’.
In light of the Chancellor’s announcement to support SMEs focusing on research and development, it is expected more UK companies across various sectors will be driving innovation and be in a position to apply for more R&D Tax Credit relief immediately.
Some sectors such as construction have increased claims but specialist R&D tax credit consultancy firm, The Momentum Group, has stressed that there is greater opportunity to grow these percentages across a full spectrum of industries.
Given the current challenging economic market due to COVID-19, Momentum Group is urging all companies to review the current innovation they are applying throughout their processes, products, services or simply something they are attempting to improve on to ensure they get what they deserve in terms of R&D Tax Credit support from Government.
It is encouraging to see the level of claims across the three key sectors but there is a great deal more potential in these sectors and across a huge variety of other businesses in Northern Ireland.
We are facing a daunting economic outlook in Northern Ireland and companies need to consider all options in order to recover; and R&D Credit Tax relief has the potential to help many businesses across NI. It is clear the Government are placing huge importance on innovation as a key driver for the recovery of our economy, with many businesses diversifying to play their part.
The monetary value of R&D tax credits to even the smallest companies could run into tens of thousands of pounds, which could benefit cash flow enormously at this time. This time next year, we would hope to see the HMRC statistics revealing a wider diversity of sectors making successful claims.
There have already been successful claims across so many sectors but the percentage is low, such as retail, accommodation and food, real estate, construction, arts and entertainment, education, transport and utilities – we believe there is so much more potential to grow the level of claims across these industries.
The Momentum Group has identified that the Mineral Products sector is one that is underutilising the available R&D Tax Credit fund. Therefore, the local company has now partnered with MPA NI to offer free R&D tax advice during this challenging period for companies.
Gordon Best, Director of MPANI, the organisation which represents 95% of the industry in Northern Ireland, said, “Most companies within the sector will find some of the MANY processes they are already carrying out are eligible for research and development (R&D) Tax Credits. Given the COVID 19 emergency that is impacting every aspect of our lives, and the need to get cash into your business, there is no better time to investigate if your company is eligible for R&D Tax Credits.
“R&D was something which was off the industry’s radar but there is innovation going on every day. The UK Government has increasingly placed greater emphasis on R&D as they want to see companies innovate and it is an area we’re very supportive of.
“MPANI would encourage all firms within our sector not to disregard the potential of claiming for R&D Tax Credits, to which they are entitled. The Momentum team have been working with many of our members over the past few years and the results have been incredible. It’s clear they are experts in their field and know what qualifies for R&D Tax Credits and what doesn’t.”
