HMRC have released their latest statistics on Research & Development (R & D) tax relief. Of the 39,960 claims so far received for 2016-17, 34,060 are for the SME scheme and 5,900 in the RDEC scheme.

There has been an increase in the number of SME claims in recent years, this is thought to be due to the removal of requirement for a minimum Research & Development (R & D) tax relief expenditure of £10,000 and increases in the SME enhanced expenditure rate, including a rise from 125% to 130% in 2015-16.

RDEC has now replaced the large company scheme with effect from 1 April 2016.

  • Most SMEs claim R&D tax credits is by a deduction from corporation tax (CT) liability.
  • Payable credits can alternatively be claimed by loss-making companies which have no CT liability.
  • Combinations claims are possible: claim enhanced relief to reduce your tax bill and then claim a credit as cash.
  • SMEs who are in receipt of state aid are often unaware that the RDEC scheme is not just for big companies.

The statistics show that large companies have made claims for £3.5bn of ‘support’ (claims under SME and RDEC scheme) whilst SMEs have made claims totalling a tiny fraction of that amount.

Claims for Vaccines Research Relief (VRR) are less than 10 per year. VRR ceased to be available for expenditure incurred on or after 1 April 2017.

By area, companies with Registered offices in the North East, Yorkshire and the Humber, Northern Ireland and Wales make the least number and lowest value of claims, and the highest value claims are made by companies based in the South East and South West.

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External links

HMRC statistics on R & D September 2018

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