Innovative businesses still to benefit from £millions of R&D Tax Credits
Thousands of Midlands businesses are failing to claim financial rewards for their innovation, product and service research and development.
Independent firm Luvo Financial, specialists in R&D Tax Credits, reports that less than one in ten of Midlands based SMEs that could be eligible for financial support from the government, has actually made a claim.
It is estimated the Midlands is home to about 0.5 million – of the three million or so UK-wide - privately-owned SMEs, thousands of which are likely to be eligible to make a claim.
However, less than 10% of Midlands SMEs eligible for R&D Tax Credits have actually claimed.
Luvo Financial Partner Ian Batkin comments: “We believe that it’s likely that at least 20% of Midlands-based SMEs have developed new products or services which would be eligible for financial support and reward from the government’s R&D Tax Credits scheme, which exists to encourage, support and reward innovation.
“But so far less than a third of these have actually made a claim, meaning there remains several thousand eligible SMEs across the Midlands that could claim, and in turn boost their revenue by tens of thousands of pounds.”
According to recent government statistics, the Midlands is lagging well behind the national average for the value as well as the total volume of R&D Tax Credit claims each year.
“Currently, each R&D Tax Credit is worth around £50,000, but the average claim made by Midlands companies was significantly lower than this overall national average SME claim at just £37,000,” says Ian.
“Bottom-line is that significantly more Midlands-based businesses could and should claim R&D Tax relief and that more could be claimed than has been. This would provide both a financial reward and recompense for the costly and time-consuming R&D work that has been undertaken, and also provides further encouragement and financial means to commit time and effort on further work on innovation in future,” he says.
“The majority of business owners believe the average value of an R&D tax relief claim in the first year is likely to be less than £20,000 when the real figure is more than double this. R&D doesn’t have to have been successful to qualify and claims can be backdated for two years.
“Furthermore, R&D Tax Credits are available to companies in all sectors, from life sciences and pharma, to food and drink, manufacturing and engineering.”
Ian adds: “The Luvo team has specialised in R&D Tax for many years and we believe the main reasons for more SME’s not claiming more, includes a lack of clear understanding of what is eligible to be claimed for and therefore who can claim, and how to go about submitting a claim that is likely to be accepted by HMRC, despite the R&D Tax scheme being launched by the government some 18 or so years ago.
“The best and easiest way for eligible SMEs to realise the benefits that can be claimed under the R&D Tax Credits scheme, and do this in an effective and minimum-risk way, would be to work closely with an experienced independent R&D Tax Credits specialist, who work on a contingent ‘no-win-no-fee’ basis and thereby has ‘skin in the game’.”
Luvo Financial is based near Wolverhampton and works with businesses and independent accountancy practices across the Midlands and elsewhere in the UK.
“Our team is committed to keeping abreast of the latest guidelines and thinking on R&D Tax Credits, has a 100% claims success record, will take the time to properly understand both your business and the eligible work that has been undertaken, and works on a contingent no-win-no-fee basis,” adds Ian.
R&D tax credits are a valuable government tax incentive for limited companies who invest time and money into developing new products, processes and services, or enhancing existing ones.
This was posted in Bdaily's Members' News section by Luvo Financial .