Posted: 10/05/19 by RSM
New data published by HMRC has revealed the hotspots for R&D tax relief claims across the South East.
Surrey-based businesses topped the league for the number of claims for R&D tax credits in 2016-17 at 1,040 claims, followed by Hampshire on 965 and Oxfordshire on 790.
In total, businesses across the South East submitted 6,300 R&D claims in 2016-17, claiming some £660m in tax relief. Compared to the data reported for the previous year published in February 2018, this represents a 39 per cent rise in the number of claims and a 16 per cent rise in the amounts claimed in R&D tax credits.
The largest number of claims across the region came from information and communications companies (1,880) who collectively claimed £130m, followed by manufacturing firms (1,335) who claimed £140m, followed by professional, scientific and technical businesses (1,290) who claimed £215m.
R&D tax credits are a tax relief designed to encourage greater R&D spending, leading in turn to greater investment in innovation. They work by either reducing a company’s liability to corporation tax or providing a cash injection for companies without a tax liability (i.e. loss-making businesses).
Commenting on the new numbers, James Tetley, Southampton based partner and National Head of R&D at RSM said: ‘Compared to the data released this time last year, the latest figures show a healthy rise in the numbers of applications for R&D tax credits, and higher payouts for South East-based businesses involved in R&D activity.
‘While this is very encouraging, there are some sectors – construction in particular – where the numbers of claims are negligible, despite the likelihood that many are involved in R&D activity.
‘The fact is there could be many more businesses across the South East that are undertaking R&D work but are missing out on the R&D tax credit payments to which they are entitled.’