R&D Tax Relief: HMRC publish take-up report.

18th September 2017

R&D tax relief, to provide government subsidies to those companies that develop innovation products, services or systems, has been with us for 17 years now. The latest HMRC R&D tax relief take-up report, encouragingly, shows that the following recent improvements to the scheme have increased the amount of tax relief claimed by 22% over the past year:

 

  • Removal of the minimum £10k project spend requirement,
  • Increase in the notional uplift tax relief percentage from 125% to 130%,
  • Increase in the R&D credit refund rate from 11% to 14.5%.

 

As you would probably expect, the report is packed with much detailed analysis, statistics and pat-on-the-back marketing language. Reading between the lines, however, some valuable insights can be gained:

 

  1. As well as arising from the expected manufacturing and ICT sectors, claims are also being accepted, perhaps unexpectedly, from sectors such as agriculture, construction and professional.
  2. The exponential rise in annual costs to the Exchequer of funding these claims does not yet appear to have resulted in the usual demands for cut-backs. This is particularly odd in these times of austerity.
  3. Uncharacteristically, HMRC seem genuinely proud of the take-up of these tax claims.

 

All of this bodes well for those companies considering making future R&D claims. Particularly as UK R&D tax relief is ultimately funded from the EU, and some commentators have concerns that Brexit might be detrimental to this. So, for once, “well done” to HMRC. Or should it be “well done” to the specialist R&D tax boutiques that are using aggressive telesales techniques?

 

Blog entry by: Jeannette Hume.



 
Other items in Blogs
 
Thomas Nicholls
15th June 2021 Tax on Cryptocurrency does not have to be cryptic

Within the last 10 years the cryptocurrency scene has exploded from the first decentralised cryptocurrency, Bitcoin, being created back in 2009 to now more than 4,000 different cryptocurrencies being in existence with a total market cap value of over £1trillion.   This has led to the creation of the Cryptoassets Taskforce which was announced back…

Read More »

Jaimie King
14th June 2021 Deferred tax rate to increase

Deferred tax is a provision on the balance sheet for timing differences in tax and accounting treatment of certain items, and is measured at the rate of tax that the differences are expected to reverse in the future.   In recent years, deferred tax has been measured at the current corporation tax rate of 19%,…

Read More »

Scott Butcher
9th June 2021 Paying VAT by Direct Debit – check your HMRC records

HMRC are in the process of moving VAT records for non-MTD registered traders from their old database to a new one.   Due to banking requirements if HMRC does not hold a valid e-mail address for a trader, when the data is transferred to the new database, any existing direct debit mandate will be cancelled.…

Read More »

James Cater
4th June 2021 Delivering Rural Investment for Vital Employment

  There is a new support programme, DRIVE, that can result in grants of up to 40% of total project costs for businesses in Norfolk and Suffolk that wish to undertake projects that primarily create new employment within the rural economy. Grants can be up to 40% of total project costs with a minimum grant…

Read More »

Steven Denton
3rd June 2021 National Insurance holiday for employers hiring veterans

Following an announcement by the government in 2020, from April 2021 employers hiring former members of the UK armed forces will be exempted from any NI contributions liability on the veteran’s salary up to the Upper Secondary Threshold (UST) in the first twelve months of their employment. However, under current guidelines relief for the 2021-22…

Read More »

Stephen Malkin
28th May 2021 Xero – Multi-factor Authentication

  Do you use Xero?   If you do, then multi-factor authentication when logging in will become compulsory after 2 July 2021.  From 1 June you will be prompted to set this up but can defer up until 2 July 2021.   Having a second layer of security is designed to prevent anyone but you…

Read More »