Companies across the West Midlands are missing out on millions of pounds in R&D tax relief savings every year compared to their counterparts across the rest of the UK
According to a Birmingham-based R&D tax relief specialist, analysis of the latest HMRC figures for the FYE 2016 shows that West Midlands businesses accounted for just 8% of total claims and total tax benefits claimed.
“Of the 26,255 claims across the UK totalling £2.9billion in tax benefits, only 2,165 claims came from companies in the West Midlands and resulted in just £230million back.”
Of the 2,165 West Midland claims, 1,845 were claimed under the SME R&D scheme and the remainder were claimed under schemes for large companies.
London and the South West made the highest number of claims in the year. London companies accounted for 19% of all claims and 29% of the total tax relief claimed, and the South West accounted for 17% of claims and 20% of the total claimed.
Jumpstart has previously said that if the West Midlands region was as effective at claiming its R&D tax relief as its counterparts in London and the South East, “it could be between £47 million and £64 million per year better off.”
The figures show a concentration of claims in the manufacturing, professional, scientific & technical, and ‘information & communication’ sectors across the UK.
Ms Smith continued: “Whilst uptake of the UK government’s R&D tax relief scheme is increasing across the UK as a whole and is very healthy in certain regions, companies in the West Midlands 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 such 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 the West Midlands.
“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 £95million in R&D tax relief and has identified over £482million in eligible R&D expenditure.
It recently opened a Birmingham office in Newhall Street with a special focus on supporting creative, digital, engineering and manufacturing firms.