HMRC has published the R&D tax credit statistics for the first full tax year under pandemic conditions which shows Northern Ireland companies continue to illustrate innovation.
According to R&D tax credits specialist The Momentum Group, analysis of the latest HMRC figures shows Northern Ireland businesses accounted for £130 million of all R&D tax credits claimed across the UK for 2020-2021. However, this accounts for just 2.6% of the total number of claims on a national level and only 1.97% of the total monetary benefit claimed. On a percentage basis, this represents no change in comparison to last year.
R&D tax credits support companies undertaking innovative activities and can be claimed by firms operating in any sector if they are seeking to overcome technological or scientific challenges.
Potentially qualifying activities may include designing new or enhanced products or processes; or seeking to use existing processes or materials in an innovative way.
The statistics come as the UK government continued recent efforts to counteract perceived abuse of the schemes in the 2022 Spring Statement. The proposed new measures are being introduced to focus R&D tax credits to companies undertaking activities in UK and tighten administrative requirements.
Of the 2,355 Northern Ireland claims, 2,025 were claimed by SMEs with the remainder claimed under the scheme for large companies. Of those SME claims, an increase of 6.6% from the previous year, 1,795 were under the SME scheme whilst 230 were undertaken by SMEs under the large company scheme.
The average amount claimed by companies in Northern Ireland was £55,202, with the average for SMEs being £41,975. For SMEs, this represents a significant change in the monetary value of claims from last year, where the average amount claimed was £47,368, a decrease of 11.4%.
Additionally, there has been a serious shift in how Northern Ireland’s larger companies are benefiting from the scheme. Statistics illustrate a 4.7% decrease in the number of claims, yet the monetary value of these have significantly increased by 14.3%.
RELATED: New programme to support SMEs to achieve their Ambition to Grow launched
Tom Verner, Managing Director of The Momentum Group, commented: “Despite the severe financial and operational challenges faced over the last few years with the pandemic and Brexit, UK businesses have displayed resilience together with innovative spirit. These properties will be tested again as we now face the global cost of living crisis.”
Tom added: “The latest figures from HMRC show that, on a directly comparative level, Northern Ireland firms hold their own against the rest of the UK. With wider economic headwinds and uncertainty afoot, it is important that innovative firms do not pass this generous initiative by.”
Source: Written from press release.
