With the cliff edge of an unclear, potentially “hard” Brexit coming up fast, there’s a great deal of talk going on about how businesses are going to cope. Rumours are even flying over some pretty large players rage-quitting the UK altogether in the face of No Deal, pulling their headquarters and workforces out of the country to minimise the damage.
Obviously, if it all plays out like that, it wouldn’t be great news for the UK economy overall. The country’s forceful push toward becoming industry leaders in many highly competitive fields could be severely blunted, for one thing. Our reputation as one of the greatest places in the world to innovate is a critical one, and it’d be incredibly damaging to lose that.
However the Brexit cards fall, though, the UK remains strongly committed to keeping innovation at the forefront of thinking and planning throughout the whole economy. The Research and Development Tax Credits scheme is still the largest and most generous incentive and reward system of its kind. Businesses shifting away from the UK will struggle to find anything like it overseas, and nothing about our upcoming departure from the EU puts a serious dent in it. What must change, however, is the number of businesses that are getting the full benefits of the scheme, because right now there are still far too many losing out.
When Boris Johnson gave his inaugural speech as Prime Minister, he made a commitment to pushing even harder to place innovation at the heart of UK business. In his own words, “We will begin right away on working to change the tax rules to provide extra incentives to invest in capital and research.”
According to HMRC’s latest published statistics, that message is getting through more clearly than ever. While there’s still a lot of work to be done in getting innovative UK businesses the R&D Tax Credits their work entitles them to, the figures are definitely on the rise. The number of SME businesses making R&D Tax Credits claims, for example, has more than doubled since 2013. Meanwhile, an impressive 5,900 claims were made under the RDEC scheme, which in itself represents an increase of 185% over the statistics when RDEC was first launched.
Comparing the two schemes on paper, at first glance RDEC tends to look a lot less generous. However, you’re not really comparing apples with apples there. When you look at the actual numbers, you see some pretty striking things. The average RDEC scheme in 2016/17 came to a massive £272,881. By comparison, the average SME claim was around £64,000 – still very respectable, but definitely underlining the fact that you need to know exactly what you qualify for to get the most from R&D Tax Credits.
As the Brexit gears grind ever onward, RIFT will continue working with innovative businesses across the UK, raising awareness of R&D tax relief and maximising its benefits. Innovation is essential in every sector and to all sizes of business. It’s about cutting risk and boosting returns, and RIFT will keep fighting to make sure you always get the credit you deserve.