Welsh businesses underclaiming R&D tax credits, warns Tax Specialist

HMRC’s latest statistics released on R&D tax credits show that 2,940 claims were made from businesses registered in Wales for the tax year 19/20, making up just 3.4% of the overall UK-wide claims that totalled 85,900.

The amount of support for Wales claimed was £170m, making up 2.3% of the total claimed overall.

The average value claim value across the UK was £57,000, all figures will continue to grow as the claim window for the year will remain open until March 2022.

English regions as a whole saw London and South-East registered companies receiving 49% of the total support given in the form of R&D tax credits for the 19/20 year, compared with the 35% of total claims made.

Leslie Maloney, tax specialist at R&D tax specialists Access2Funding said: “The key take-aways from this year’s R&D tax credit report is the two growth areas in Professional, Scientific and Technical and Information and Communication, both of which saw significant expansion in number of claims made in 2019-20.

“I personally believe this report shows opportunity for real growth for innovative businesses, particularly in those high growth sectors and a shift towards the new economy. The more traditional sectors like Manufacturing and Construction have been claiming R&D for many years and we expect this to continue but for Professional, Scientific and Technical and Information and Communication to be the main drivers of growth in helping the country to recover economically. This will be reflected in 2022’s report.”

An ongoing issue highlighted by the data is the comparative under-representation of Welsh companies in the claim figures.  2.3% of the total claimed was by companies registered in Wales, which contains approximately 4.5% of the population of the UK.

Leslie continued: “As a comparison, in the 19/20 year, Northern Ireland, with approximately half the population of Wales, received £135m in R&D tax credits, against the £170m for Wales.  It would appear that there is scope for Welsh businesses to pursue additional support for the innovation they create.”

Access2Funding is the fastest growing R&D tax specialist in the UK. It has so far claimed back over £44m of R&D for businesses and has offices across the country, from the Scottish Highlands down to and Kent.

For more information visit the website or email hello@access2funding.co.uk