Data published by HMRC suggests that companies in the North West of England are losing out on their share of Research and Development Tax Credits. In 2017-18, £4.28bn of tax relief support had been claimed, with just 6.4% of this being claimed by North West registered businesses (£275m).
The claims are concentrated in companies with a registered office in London, the South East or the East of England, amounting to 61% of the total amount claimed for 2017-18. The North West also falls behind the West Midlands for the total amount of tax relief claimed.
R&D Tax Credits are a tax incentive put in place by the government in 2000, to encourage companies to innovate. They can result in up to a 230% tax deduction on the qualifying amount spent.
John McCaffery, partner at Alexander & Co, Chartered Accountants commented “Many businesses, are missing out on this generous tax relief, as they incorrectly believe that they are not eligible.
“A common misconception is that these tax reliefs only apply to science and technology companies, or those with specialist research and development departments. We have worked with many companies in the North West as diverse as a manufacturer who created a new type of false ceiling, a Startup who created a new app and a retail client who installed a new software system, all benefitting from this relief.”
“In fact, any company can take advantage of these generous reliefs, providing they seek to advance their knowledge, improve a service/product or solve uncertainties in a process. If a company is undertaking any of these processes, we strongly recommend that they investigate whether this government incentive is available.”
Alexander & Co was established in Manchester in 1976. With offices in Manchester City Centre and MediaCityUK, the company provides a range of services such as accountancy, taxation, corporate finance and advisory services to owner-managed businesses across the UK.