Specialist R&D Tax & Grant Funding Advisors

2019 R&D Tax Credit Statistics

Barrie Dowsett

Chief Executive Officer


HMRC has just released provisional R&D tax credit data for 2019. As is the case with previous years, statistics for 2019 are not yet complete and should be viewed as provisional, until the data is revised next year. Below are some key findings taken from the report.

Key Findings:

  • So far there have been 48,635 R&D tax credit claims for 2017-18, of which 42,075 are in the SME R&D scheme. This is based on partial data for the year and expected to increase as more returns are received.
  • So far £4.3bn of R&D tax relief support has been claimed for 2017-18, corresponding to £31.3bn of R&D expenditure.
  • Due to the nature of the scheme, returns for the latest financial year reported (2017-18) can still be submitted past the cut-off date for the publication. As a result data for 2017-18 is not yet complete. To avoid misleading comparisons between years HMRC have compared the years 2016-17 to 2015-16 in the publication when discussing change between years, and 2017-18 when discussing in-year characteristics
  • In 2016-17 the total number of claims for R&D tax credits rose to 52,335, an increase of 20% from 2015-16. The increase was primarily driven by a rise in the number of SME claims, which totalled 45,045 in 2016-17, an increase of 22% from 2015-16.
  • The total amount of R&D support claimed increased to £4.4bn in 2016-17, an increase of 14% from the previous year.
  • The total value of R&D expenditure against which claims were made was £32.8bn in 2016-17, an increase of 4% from the previous year.
  • R&D claims are concentrated in companies with a registered office in London, the South East or the East of England (46% of all claims and 61% of the total amount claimed for 2017-18). However, the regional split is based on the registered head office location so may not be where all of the R&D activity takes place.
  • The ‘Manufacturing’, ‘Professional, Scientific and Technical’, and ‘Information and Communication’ sectors continued to have the greatest volume of claims, making up a total of 68% of claims and 73% of the total amount claimed for 2017-18.
  • Between 2000-01, when the R&D tax credit schemes were launched, and 2017-18, over 300,000 claims have been made and £26.9bn in tax relief claimed.

R&D Tax Credits can help companies grow and can boost employment in the economy as a whole. The continuing increase in the number and value of R&D Tax Credit claims is a welcome development, but we believe that there are still thousands of companies that aren’t claiming what they are entitled to, mainly because they are not well-informed about the scheme. It’s our mission to reach out to those companies and help them benefit from this valuable government incentive."

Barrie Dowsett, CEO, Myriad Associates

What are R&D Tax Credits and who can apply?

Research and Development (R&D) Tax Credit is designed to support companies that are working on particular innovative, scientific or technological advances. This could be anything from designing a new product, service or process to enhancing one that already exists. It can even be claimed on activities which were unsuccessful and to help companies which are loss-making.

Essentially, in order to qualify for R&D Tax Credits, the work must mean advancement in the overall field, not just for your own company. This means that an existing technology being used for the first time in your industry doesn’t count towards the relief.

The relief is received either as a reduction in a company’s Corporation Tax or as a lump sum.

Projects that count as R&D

Work undertaken must be part of a specific project to make an advancement in science or technology. It cannot be in a theoretical field, for example pure maths, or a social science like economics.

The project must also be in relation to your company’s trade – either one that will be started once the R&D activities are complete, or one which currently exists.

To receive R&D Tax Credits, you must be able to explain to HMRC how the work:

  • Looked to overcome a particular uncertainty (either technological or scientific)
  • Aimed to make a specific scientific or technological advancement
  • Recognised uncertainty and tried to overcome it
  • Could not easily have been achieved by a professional in the field

There are two branches to the scheme, one for small and medium sized enterprises (called the SME scheme) and one for larger organisations (the RDEC scheme).

Which R&D Tax Credit scheme should my company use?

Small and medium sized enterprises (SMEs) should apply for their R&D relief using the SME programme, as long as:

  • They have no more than 500 staff
  • They have a turnover of under 100 million euros or a balance sheet total under 86 million euros

You may need to include groups, partnerships and linked companies when working out if you’re an SME.

SME R&D Tax Credits will allow your company to:

  • Deduct an additional 130% of their eligible costs from their annual profit, plus the normal 100% deduction. This makes a total 230% deduction
  • Receive a tax credit worth up to 14.5% of the surrenderable loss if your company is not turning a profit

Larger companies should make their application under the Research and Development Expenditure Credit (RDEC) scheme. However, this scheme can also be used by SMEs and larger companies who’ve been subcontracted to do R&D works by another larger company.

Tax Credits under the RDEC scheme allow 12% of a company’s eligible R&D expenditure, which is notably less generous than the SME scheme.

Speak to the R&D experts at Myriad Associates

At Myriad Associates we deal with companies looking to claim R&D tax relief and we have years of expertise at our fingertips. Our team is made up of a range of tax advisors and specialists who understand the complexities around R&D Tax Credits and grants, and will be happy to guide you through the application process.

Call us on 0207 118 6045 or use our contact page for personal, tailor-made advice.

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