Crowe urges SMEs to focus on R&D tax credit incentives

Despite the positive increase in the number of Research and Development Tax Credit claims made in 2017 and 2018 compared to previous years, Johnathan Dudley, partner and national head of manufacturing, based at Oldbury, believes that there are still a large number of companies who are missing an opportunity.

He said: “The manufacturing, professional, scientific and technical, and information and communication sectors continued to have the greatest volume of claims, making up a total of 66 per cent of claims and 71 per cent of the total amount claimed for 2018-2019, but they still represent only a small proportion of the companies registered at Companies House.”

He is calling on business owners in all sectors to examine whether their company could qualify.

“The extreme challenges the pandemic and lockdown have presented, has also provided a catalyst for some great ideas and innovation across a number of sectors – notably in manufacturing.

“If you are re-starting your R&D, or considering it, I urge you to find out if you qualify for this valuable tax incentive as soon as possible.”

Corporate tax partner Stuart Weekes, who specialises in R&D Tax Credits, said: “It is really encouraging to see such a large increase in the number of R&D tax credit claims that have been made 2017-2018 and 2018-2019 compared to prior years and fantastic that so many SMEs have submitted claims.

“It will be interesting to see whether this upturn in the number of claims being made will in turn result in an increase in HMRC enquiries into the R&D tax credit claims that have been made. Some companies will have put R&D investment on hold in order to survive the downturn during the pandemic, but unfortunately because of the delay, as they now re-start their R&D programmes, this could result in a time lag before they receive the benefit of this investment. So I would encourage businesses to look into their claims for this tax incentive sooner, rather than later.”