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East Midlands Chamber News

Claims for R&D tax credits increased 52%

Her Majesty's Revenue and Customs has reported a 52% rise in the number of claims for research and development tax credits submitted by East Midlands companies in 2016-17, with the level of support provided rising by 12%.


The latest data shows that companies in the East Midlands submitted 2,430 claims for research and development tax credits in 2016-17, up from 1,595 in 2015-16 reported in September last year.


The total amount of R&D support claimed rose to £145m, an increase of £15m from the previous year.


A total of £885m was claimed as qualifying R&D in 2016-17, a 17% decline from the previous year.


Introduced in 2000, R&D tax credits are designed as a tax relief to encourage greater R&D spending and innovation.


They work by reducing a company’s tax bill by an additional amount depending on the company’s allowable R&D expenditure.


Since launch, UK businesses have submitted over 240,000 claims, with £21.4bn claimed in tax relief.


Over time, the rate of relief has become more generous and is now worth up to 230% for SMEs. This means that for each £100 of qualifying costs, the corporation tax paid by SMEs on income could be reduced by up to an additional £24.70, East Midlands Business Link reported.