Newly released HMRC statistics show an increase of 714% in the amount of R&D (research and development) tax relief savings being claimed by Welsh companies over the last seven years, the second highest level of growth across the UK.

The latest figures show businesses in Wales accounted for 3% of the total value of claims made across the UK in the year 2016-2017, according to R&D tax relief specialist Jumpstart.

Partial figures released by HMRC show 39,960 successful R&D tax claims for 2016-17, with over 34,000 of these secured within the SME scheme. To date, £3.5bn of R&D tax relief support was claimed in this latest period against £24.9bn of innovation-related expenditure.

The figures also show 1,245 claims secured in Wales so far for the latest 2016-17 period with 1,080 being made by SMEs, accounting for around £50m in tax rebates with the remainder claimed under schemes for large companies. The HMRC stats also show a strong focus within Manufacturing where 25% of all R&D tax relief claims were made, securing 29% of the total claimed.

Companies listed under the Information & Communication’ sector made 26% of claims (20% of total amount claimed), while those in the ‘Professional, Scientific & Technical’ accounted for 19% of the number of claims and 24% of the amount of overall relief secured across the UK.

Commenting on the new figures, Wendy Smith, Jumpstart’s Welsh Business Development Manager said:

“Although Wales continues to have a low number of R&D tax relief claims compared to other parts of the UK, it has seen the second-largest overall increase over the last seven years, up by 714% in that period which is second only to Northern Ireland in growth. This is an encouraging development which shows innovation continues to grow in Wales and Welsh businesses are waking up to the benefit of R&D tax relief. “With HMRC increasing its scrutiny over R&D tax relief claims, however, it is vital for businesses to ensure they have the right expertise and support to ensure their technical project activities and expenditures are being accurately interpreted against government legislation.”

Introduced in 2000, R&D tax credits are designed to drive competitiveness in British business by incentivising companies to invest in innovation. The new stats show that 240,000 claims have been made since that time with £21.4bn in tax relief claimed. Since its inception, Jumpstart has helped its clients recover over £100m in R&D tax relief and has identified over £500m in eligible R&D expenditure.

Categories: Finance South Wales