Welsh companies have seen a resurgence in the number of R&D tax relief claims being made compared to their counterparts across the rest of the UK.
According to R&D tax relief specialist Jumpstart, although Welsh companies represent a relatively small part of the UK total, Wales has seen one of the largest increases
With an increase of 86% year on year in the total R&D tax credits claimed in 2015-2016, analysis of the latest HMRC figures for the financial year ending 2016 shows that Welsh businesses accounted for 3% of total claims and 2% of the total tax benefits claimed.
“Of the 26,255 claims across the UK totalling £2.9billion in tax benefits, 825 claims came from companies in Wales resulting in £65million back.”
Of the 825 Welsh claims, 705 were claimed under the SME R&D scheme and the remainder were claimed under schemes for large companies.
London and the South East 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 East accounted for 17% of claims and 20% of the total claimed.
The figures show a concentration of claims in the manufacturing, professional, scientific & technical and information & communication sectors.
Wendy 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 Wales 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 Wales.
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.