Top 40 advisory firm, Bishop Fleming, says West country companies are continuing to miss out on millions of pounds of research and development (R&D) tax credits, compared to companies in other parts of the UK who are receiving proportionally more in government funds for being innovative.
The R&D tax specialist, which also delivers accounting, tax, corporate, restructuring and advisory services to businesses and private wealth advice to individuals, says that even though there has been a 20 per cent increase in companies claiming R&D tax credits across the UK, there was only a 16 per cent increase for South West companies, which accounted for just 8 per cent of total UK claims and only 5 per cent of the total amount claimed.
Andrew Browne, Head of Tax at Bishop Fleming, said: “The latest R&D statistics from the government bring into clear focus the opportunities available to companies in the region to save tax and receive tax credits, when compared to what companies in other regions of the UK are claiming.”
Mr Browne added: “Of the 26,255 claims made in 2015-16 across the country, totalling £2.9bn in tax breaks, only 2,040 claims were made by Westcountry companies, reaping the benefits of only £130m – an average of just over £60,000 per claim.”
The Bishop Fleming Tax Partner continued: “There is so much potential for the region's innovative companies to be rewarded for their hard work. Many companies simply don't think they are eligible to claim, but that is a stubborn myth; the tax benefits are potentially there for all that are developing and improving their products, services or processes.”
The government has sought to make the R&D scheme more attractive through increases in the rates of relief, as well as the scrapping of a £10,000 deminimis limit on R&D expenditure before a claim could be made.
Bishop Fleming secured over £66m in R&D tax credits for businesses in the past year, having secured over £200m in R&D relief over the past six years.
Mr Browne said: “R&D applies to a wide range of businesses, not just those who wear white coats in labs. It has taken over 17 years for companies to recognise the potential to save £millions in tax from R&D tax credits, and we are helping hundreds of companies to grab that opportunity.”