R&D claims at an all-time high (per latest HMRC statistics) BUT…

HMRC recently published Research and Development (R&D) tax credit statistics in relation to the year ending March 2020. The latest statistics show total claims of 85,900 (an increase of 16% on the prior year) and a total value of support of £7.4bn (an increase of 19%).

However, whilst this appears encouraging for R&D claimants it potentially doesn’t tell the full story. The data is historical and relates to pre Covid times. Furthermore, we understand that in late 2020 HMRC recruited 100 additional people dedicated to overseeing the processing and review of R&D claims.

Therefore, it has never been more important to ensure your claim documentation is robust and that you have received the necessary professional advice to substantiate your claims. Without the appropriate documentation for current R&D claims there is the risk that both current claims and previous claims could be challenged with value already received being clawed back.

We have highlighted below some key points from the latest statistics:

SME Claims

  • The total number of SME claims is 76,225 – up from 65,480 in 2019, an increase in claimants of 16.4%.
  • The total value of SME claims is £4.4bn – up from £3.5bn in 2019 an increase in cost to HMRC of £900m.

RDEC Claims

  • The total number of RDEC claims is 9,675 – up from 8,725 in 2019, an increase in claimants of 10.9%
  • The total value of RDEC claims is £3.1bn – up from £2.8bn, an increased cost to HMRC of £300m.

Claims by industry

  • Information and communication, manufacturing and professional, scientific & technical made up 63% of the total claim and 69% of the total value.

Claims by geography

  • There remains a significant concentration of R&D claims in London and the South-East. These regions amount to 35% of total claims but 49% of the total value.

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