The quantity of businesses in the East Midlands seeking tax credits for R&D has risen by 24% over the last year, says HMRC.
The latest data shows that companies within the East Midlands submitted 1,595 claims for research and development tax credits in 2015-16, up from 1,285 in 2014-15. The check of R&D support claimed rose to 130m, a boost of 25m on the previous year.
The total price of regional R&D expenditure by which claims were made was 1.0bn in 2015-16.
First introduced in 2000, R&D tax credits are made being a tax relief to encourage greater R&D spending and innovation. They work by reduction of a company’s goverment tax bill by another amount with respect to the company’s allowable R&D expenditure. Since launch, over 170,000 claims happen to be made nationally, with almost 16.5bn claimed in tax relief.
Over time, the pace of relief is now more generous and is particularly now worth as many as 230 per-cent for SMEs. Therefore each 100 of qualifying costs, the corporation tax paid by SMEs on income could be reduced by approximately another 24.70 (applying 19 % UK corporation tax rate for FY17).
Sheetal Sanghvi, R&D tax specialist at RSM said:?”The boost in how many claims along with the a higher level support given to East Midlands companies undertaking eligible R&D is impressive. This reflects a continuous increase in the attention of those important tax reliefs along with the positive impact of two changes made by the govt to enhance the credits designed for SMEs and enormous companies in 2015-2016.
“Claims have continued to improve in each area of the UK as well as range of brand new applicants has again increased dramatically. Companies who’ve not yet considered R&D tax credits should review their position now, as they quite simply is probably not benefiting from the tax reliefs that they will be eligible for which is potentially putting them in the competitive disadvantage.”