R&D Tax Relief – Update

HM Revenue & customs (HMRC) has recently published its annual statistics for company claims for Research & Development (R&D) tax relief claims.

There continues to be an increased uptake in claiming the generous relief, partly as the relief becomes even more generous and partly as more and more companies become aware of the relief for the first time.

The data is for the 2012/13 financial year. The headline statistics are: ◾Since its introduction in 2000 over 100,000 claims have been made by over 35,500 different companies claiming in excess of £9.5 billion in tax relief ◾15,930 claims were made in 2012-13, an increase of 26% over the previous year; qualifying costs within the claims totalled £13.2 billion, 10% higher than the previous year ◾“Manufacturing”, “Professional, Scientific and Technical” and “Information and Communication” sectors accounted for 77.1% of the claims and 80% of the total amount claimed (sector data based on SIC2007 coding for claimant company) ◾8,740 claims by Small and Medium Sized Enterprises (SMEs) (being a very generous definition of such for this purpose) reduced their tax bills whereas a further 1,220 SMEs claimed payable credit (cash back) as they were loss making. 3,050 SMEs made a claim for a combination of tax deduction and cash back ◾Although SMEs make up the greater number of claims, 80% of expenditure claimed was made by large companies (£10.6 billion compared to £2.6 billion for SMEs) ◾580 SME companies claimed under the large scheme as sub-contractors to large company R&D ◾545 claims were made in the North East of England, 1,545 in the North West of England, 1,065 in Yorkshire and Humber and 905 in Scotland, claiming £25m, £85m, £45m and £45m respectively. Over 40% of claims are made by companies in London and the South East. (region data based on registered office)

What’s stopping you making a claim?

There are still many companies failing to make claims for various reasons. Our experience shows that generally business owners, like yourself, usually think that some or all of the following apply: ◾We are not doing R&D – many companies do not initially realise that their project qualifies as R&D ◾Claiming the relief is complicated – not if you seek good advice ◾The costs of claiming outweigh the benefits – this is rarely the case and our charges are structured based on the tax savings generated ◾We cannot separately identify costs – HMRC does not expect you to reinvent your accounting records to make a claim and will accept some elements of estimation ◾We’ve received a grant towards R&D or capital expenditure, therefore we can’ have the tax relief too – this is by far the biggest misconception. The receipt of a grant may affect how much additional tax relief the company can claim but you can have both!

What tax relief is available?

The three tax reliefs for innovative companies are very generous and are: 1.R&D tax relief as above. 125% additional relief on costs for SMEs, 30% for large companies or SMEs with grant funding or subcontractors to large companies. New Research & Development Expenditure Credit (RDEC) for large companies to allow for payable credit as an alternative to the 30% relief 2.Patent Box – an effective 10% rate of Corporation Tax on relevant profits from patents 3.100% capital allowances for assets acquired, including buildings, used in R&D

How Pierce can help you

We have many years’ experience preparing R&D claims for a range of businesses. We have a 100% record with HMRC – none of our claims have been reduced or rejected by HMRC. In the previous 12 months we have secured R&D tax refunds in excess of £500,000 for our clients. We can also help you claim R&D tax refunds for previous tax years if you haven’t previously made a claim. We offer a free no obligation review of your business activities to identify any R&D tax planning opportunities for you. Contact either Ben Smith or Tom Wilkinson by phone on 01254 688100 to find out more.

Enjoyed this? Read more from Pierce CA Ltd

Latest news

1

CMAC Group appoints Matthew Ratcliffe as chief operating officer Matthew Ratcliffe CMAC

CMAC Group appoints Matthew Ratcliffe as chief operating officer

03 Apr 2025

2

For sale signs at The Villa Villa Wrea Green has been brought to market (Image credit: The Villa Wrea Green)

For sale signs at The Villa

02 Apr 2025

3

Montane group expands with new Lancashire hub Anthony Rae Scott Murcott And Adam Lee

Montane group expands with new Lancashire hub

02 Apr 2025

4

Trio of wins for Lancaster brand and digital consultancy Tom Grattan MD and Daniel Wallace

Trio of wins for Lancaster brand and digital consultancy

02 Apr 2025

5

College excellence highlighted in Ofsted report Fazal Dad

College excellence highlighted in Ofsted report

02 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

Chamber Breakfast Networking – April
Chamber logo - new-02.png.png
LBV Hub Networking
03 Apr 2025 - 03 Apr 2025

Chamber Breakfast Networking – April

The Dukes Theatre, Lancaster, LA1 1QE

08:00 - 10:00

WHN Charity Quiz Night
Evenbrite Quiz 2025.png.png
LBV Hub Fundraisers
03 Apr 2025 - 03 Apr 2025

WHN Charity Quiz Night

The Stables Country Club, Bury , BL9 1PU

18:00 - 22:00

Lancashire Business Expo 2025
https---cdn.evbuc.com-images-880395853-4862066883-1-original.20241022-091152-2.jpeg.jpg
LBV Hub Exhibitions
04 Apr 2025 - 04 Apr 2025

Lancashire Business Expo 2025

Sir Tom Finney Sports Centre, Preston, PR1 2HE

09:00 - 15:00

The Business Network Central & East Lancashire
LBV Hub Networking
24 Apr 2025 - 24 Apr 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

People Power: Exclusive Event Series
Stay ahead in 2025.jpg.jpg
LBV Hub Seminars
29 Apr 2025 - 29 Apr 2025

People Power: Exclusive Event Series

People's History Museum, Manchester, M3 3ER

17:00 - 21:00

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Amber River True Bearing quarterly investment seminar
LBV Hub Seminars
22 May 2025 - 22 May 2025

Amber River True Bearing quarterly investment seminar

Cottons Hotel & Spa , Knutsford, WA16 0SU

16:00 - 18:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin