Companies losing millions in unclaimed R&D Tax Credits

Grant Thornton insists growth in claims is still too modest and more companies could be benefiting

Total claims still stand at under £1bn per annum

The Office for National Statistics (ONS) said today that there has been a year-on-year increase in claims for Research and Development (R&D) Tax Credits, but financial advisers Grant Thornton argued that the figure is still too low and that companies could be losing out on millions.

Research and development necessarily includes outlay on technology, and most IT companies will have a substantial R&D arm.

The credit is made available as a tax deduction based on a company’s R&D spending. Originally introduced for small and medium-sized enterprises (SMEs), the scheme was extended to large companies in April 2002.

"There has been a steady increase in claims since the inception of this scheme, but it is still surprising how few claims are made when you consider how many companies are involved in research and development in the UK,” said Niki Dixon, head of technology at Grant Thornton.

“In [FY] 2008-2009, [the most recent year] there were only 6,600 small company claims made, a modest 10 per cent increase on the previous year,” she added.

Large companies have also only increased claims by 9.5 per cent in the past year.

These statistics come ahead of the much-anticipated report from inventor and entrepreneur James Dyson, who is applying pressure on the government to both maintain R&D tax credits in the UK and refocus the scheme on the SME sector.