HMRC’s latest statistics on the R&D tax credits and Patent Box were published on 30th September, our experts have put together a short summary of the key information.
R&D Tax Credits
As of 30 June 2020, there have been 59,265 R&D tax credit claims for 2018-19, of which 52,160 are in the SME R&D scheme. (This is based on partial data for the year and expected to increase as more returns are received.)
As of 30 June 2020, £5.3bn of R&D tax relief support has been claimed for 2018-19, corresponding to £35.3bn of R&D expenditure.
In 2017-18 the total number of claims for R&D tax credits rose to 62,095, an increase of 17% from 2016-17. The increase was primarily driven by a rise in the number of SME claims, which totalled 54,005 in 2017-18, an increase of 19% from 2016-17.
The total amount of R&D support claimed increased to £5.1bn in 2017-18, an increase of 15% from the previous year.
The total value of R&D expenditure against which claims were made was £36.5bn in 2017-18, an increase of 8% from the previous year.
There was a concentration of R&D claims from companies with a registered office in London, the South East or the East of England (45% of all claims and 60% of the total amount claimed for 2018-19). However, the regional split is based on the registered head office location so may not be where all the R&D activity takes place.
Areas of growth:
The ‘Manufacturing’, ‘Professional, Scientific and Technical’, and ‘Information and Communication’ sectors continued to have the greatest volume of claims, making up a total of 66% of claims and 71% of the total amount claimed for 2018-19.
There have been 15,750 first time applicants for R&D tax credits in 2017-18, an increase of 10% from the previous year. This increase is largely driven by SME companies.
Between 2000-01, when the R&D tax credit schemes were launched, and 2018-19, over 300,000 claims have been made and £33.3bn in tax relief claimed.
Patent Box Relief:
In 2017-18, 1,305 companies claimed relief under the Patent Box, and the total value of relief claimed was £1,101 million.
The value of relief claimed increased year on year from 2013-14 to 2015-16 as the benefit of the Patent Box was phased in, and this continued in 2016-17 and 2017-18.
Of the companies that claimed in 2017-18, 28% were classified as ‘Large’, but these companies accounted for most of the relief claimed (92%).
Over half (715) of the companies that claimed in 2017-18 were in the Manufacturing sector (including Pharmaceuticals), accounting for 30% of the relief.
The highest proportion of relief (34%) was claimed by companies in the Financial and Insurance sector, despite only 10 companies claiming relief.
The number of companies claiming relief varies significantly across UK regions. The fewest number of claims were made from the North East (2% of the total in 2017-18), and the most were from the South East (16%); although London-based companies claimed the largest amount of relief (47%).
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