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Many UK businesses in the UK may be missing out on significant reductions in their Corporation Tax liabilities by not claiming the additional Corporation Tax relief they are entitled to for Research and Development. But is it possible to know just how many businesses there are that could be claiming R&D tax relief but aren’t doing so? While we can’t put an exact figure on this we thought we might look at two different sets of official statistics and try to make some sort of estimate.
HMRC publishes statistics on the number of R&D tax relief claims it processes. For 2013-14, the last year for which figures are available, the total number of claims for all the R&D tax relief schemes was 20,100. (The full statistical report is available on the HMRC website.)
Is 20,000 a high or low number compared the number of businesses that could be claiming R&D tax relief? To know that we have to find out how many businesses there are in the UK, and luckily, the Department for Business Innovation & Skills (BIS) does have statistics on the number of businesses in the UK.
The BIS figures show that there were 4.9 million private businesses in the UK at the start of 2013. However, more than 75% of businesses didn’t have any employees other than the owner, and it’s highly unlikely that a single-person business would be undertaking any research and development projects. This leaves us with approximately 1.1 million businesses that do have employees. Clearly, many of these businesses are in the services sector, but there must be some proportion of these 1.1million businesses that could be eligible for R&D Tax Credits. Our guess is that perhaps 10% of businesses with employees, or 110,000 businesses, could be eligible. In that case, if only 20,000 claims are processed each year there could be something like 90,000 businesses in the UK that are eligible to claim R&D Tax Relief but are not doing so.
Myriad Associates are leading experts in helping businesses maximise public funding for their research and development activities through R&D Grants and R&D Tax Credits. If you think your business may be one of the thousands of businesses that is missing out on R&D tax relief please contact us today for a free, no-obligation consultation. We look forward to hearing from you.