Every Autumn, Research and Development Tax Relief statistics are released.  These can be quite dry reading but do give some useful insights into the number and value of R&D claims being submitted and the type of companies claiming R&D tax relief.

The main item of note this year is the increase in R&D claims which are being submitted.  On the surface, this can be seen as a good thing as R&D tax relief has been underutilised for almost two decades but could these encouraging numbers be meaningless?

In a perfect world, every R&D claim would be scrutinized to ensure that it was a valid claim.  However, we do not live in a perfect world and HMRC do not have the capacity to check all claims that are submitted.  This means that many successful R&D claims wouldn’t actually stand up to HMRC scrutiny if they hadn’t managed to fly under the radar.

So, does an increase in R&D claim submissions actually mean the relief is being better utilised or does it just mean that more companies are accessing funds they may not be entitled to?  Unfortunately, this is not a question that can be answered with the data available but my fear is that it is the latter.

If you are a company owner/decision maker and have any questions about R&D Tax Credits or how they could benefit your company, please get in touch via our Contact Us page.

If you are an accountant and want to talk about how you can ensure your clients are well provided for in terms of R&D Tax Credits, please get in touch via our Contact Us page.

Anyone interested in the statistics can find them here: https://www.gov.uk/government/statistics/announcements/research-and-development-tax-credits-statistics-october-2019

Posted: 10 Oct 2019