Latest statistics, released by HMRC, have shown a continued growth in the total number of research and development Tax Credit claims submitted by UK businesses. However, Mike Price, director at The MPA Group, highlights that thousands of businesses, including manufacturing and engineering firms, are still missing out on a vital cash benefit.
As the ninth largest manufacturer in the world, UK manufacturing and engineering businesses contribute a fifth towards total UK GDP. The sector also led the way for the total number of research and development Tax Credit claims, making up almost 30 per cent of all those submitted in 2016-17.
Price believes this continued growth amongst the sector is a result of a conscious effort towards innovation, which is once again high on the business agenda. He said: “While the continued growth reported by HMRC is encouraging, it’s also important that businesses continue to invest to further capitalise on this inertia.
“For many manufacturing and engineering-led businesses it is often hard to capture the activity that qualifies for research and development Tax Credits and can deliver a vital cash injection to be used to enable an expansion of premises, the recruitment of additional members of staff or new equipment.”
Latest HMRC figures show businesses benefited from an average claim value of £109,500. Over the last 12 months, MPA has delivered more than £31m in tax savings to UK businesses, of which £11m was delivered to the nation’s manufacturing businesses.
Price added, “Often, when we first speak to a client, we find that there are misconceptions regarding exactly which activity qualifies for research and development Tax Credits. For many, it’s about looking at the things they do as part of their day-to-day operations and identifying the innovation within this — qualifying activity that often goes unrecognised. Our team of experts not only have an in-depth understanding of the HMRC process, but also hold a thorough understanding of the manufacturing and engineering sectors, to ensure businesses are able to maximise their research and development Tax Credit claim.”
The total amount of research and development support claimed in 2015-16 has risen to almost £2.9bn — an increase of £470m (20 per cent) on the previous year. This is growth that is further supported by an increase in research and development expenditure, which rose by 4 per cent in 2015-16, to £22.9bn.
