R&D Answers: What Has Been The Impact of UK R&D Credits?

Date: 23rd August 2011

In money terms what has been the impact of Research and Development Tax Credits for UK business?

The last figure published by HMRC indicated that in excess of £8b has been reclaimed since Research and Development Tax Credits were introduced in 2000 by all types of companies. In the latest year for which figures are available, 2011/12, the number of claims for R&D tax credits rose from the previous year by 16.5% to 12,190, representing £1.2 billion of tax relief support, based on £11.9 billion of R&D expenditure. The increase in number of claims in 2011- 12 is more than double the previous year. SME claims rose in number by 20%, large company claims by 8%, and large company sub‐contractor claims decreased by 5%. For the 250 companies where we have helped with justifications relating to in excess of 2000 projects, I estimate they have benefitted by in excess of £10m. With the last four claims completed, each covering two financial years, the average claim was £43,000. However, a survey in November 2008 by one of the UK’s leading accountancy practices estimated that around 50% of SMEs entitled to apply for Research and Development Tax Credits had not done so.

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