Garry Keith of JumpStart
New figures released by HMRC show that London companies are outshining the rest of the UK when it comes to making significant R&D tax savings.
With the total number of R&D tax credits claimed in 2015-2016 increasing by 19% year-on-year, analysis of the latest HMRC figures for FYE 2016 by JumpStart shows that companies in the capital accounted for 19% of total claims and 29% of the total tax benefits claimed.
Garry Keith, business development manager for Jumpstart in London, said: “These figures are extremely encouraging to see, but I feel there is room for even more uptake of HMRC’s R&D Tax Relief scheme. Of the 26,255 claims across the UK totalling £2.9bn in tax benefits, 4,885 claims came from companies in the capital, resulting in £820m back in R&D tax relief.”
Of the 4,885 claims from London, 3,995 were claimed under the SME scheme, and the remainder were claimed under large company schemes.
Although London made the highest volume of claims in 2015-2016, it recorded one of the lowest rates of growth in claims.
The South East of England made the next highest number of claims in the year, accounting for 17% of claims and 20% of the total claimed.
The figures show a concentration of claims in the ‘Manufacturing’ [28% of claims and 32% of total claimed]; ‘Professional, Scientific & Technical’ [20% of claims and 23% of total claimed]; and ‘Information & Communication’ [26% of claims and 20% of total claimed] sectors across the UK.
Keith continued: “Whilst uptake of the UK government’s R&D tax relief scheme is increasing across the UK as a whole and is healthy in the London region, companies in London are clearly not reaping the full benefits of the scheme.
“Also, local companies could be under claiming or over claiming because their technical project activities and expenditures are not being accurately interpreted against government legislation. As well as the introduction of increased scrutiny over claims by HMRC, the process of claiming is very much a technical assessment, so it is important that companies instruct a specialist advisor to handle this for them.
“There is huge scope for a much more focused uptake by companies in London. I would urge firms here to get in touch with Jumpstart or their advisors to find out more about how they can make significant tax savings through R&D tax credits if they are making a profit or get a cash credit if they are loss making.”
Since its inception, Jumpstart has helped its clients recover over £95m in R&D tax relief and has identified over £482m in eligible R&D expenditure.