The Chancellor delivered his first Spring Statement earlier this month, following the first Budget in the Autumn. As expected, no major announcements were made. However, it was clear that Research and Development (R&D) is high up on the political agenda.
As well as championing the UK’s technology sector and “planning to unleash creators, innovators, investors and discoverers”, Mr Hammond reiterated support for the National Productivity Fund (a £31bn fund for infrastructure, R&D and housing) and the Modern Industrial Strategy, released earlier this year, that includes investment in R&D as one of its key pillars.
This shows that support for R&D investment, especially with Brexit on the horizon, shows no sign of reducing, and if anything, is likely to keep increasing.
One of the biggest areas of support that has almost doubled in size in recent years is the tax system. If applied for with the help of experienced advisers, it is also one of the easiest ways to fund R&D. R&D tax relief and credits provide c£2.9bn of funding to UK businesses each year. This includes both profitable and loss-making companies of all sizes. At present, it provides cash savings and payments covering almost 10% of R&D costs for large businesses and 25% to 33.3% for SMEs.
Surprisingly the relief is still underutilised. Many eligible businesses are not claiming either due to lack of awareness or through a perception that it is too much hassle to claim.
The tax team at MHA Carpenter Box have been helping clients obtain R&D funding for years and have a dedicated team of specialists. If you have any questions about Research & Development tax relief, please contact them on 01903 234094.