Local firms missing out on thousands of pounds in R&D tax credits
COMPANIES in Northern Ireland are missing out on tens of thousands of pounds of Research and Development (R&D) Tax Credits, according to the latest HMRC figures.
The research shows that despite R&D Tax Credits aiming to drive innovation, Northern Ireland continues to fall behind nearly every other region in the UK, with local companies claiming a total amount of £45 million in 2016.
The analysis indicates a positive trend for Northern Ireland with an increase of 29 per cent in the total value of Tax Credits claimed since 2015, compared to the UK average of 19 per cent, but it still lags behind other regions such as south east England which secured £570 million tax claims.
Furthermore, the average received per R&D tax claim by companies in Northern Ireland was only £57,000, with the north accounting for just three per cent of total claims and 1.6 per cent of the total tax benefits claimed.
Bangor tax credit specialists the Momentum Group believe a lack of awareness and understanding is hindering Northern Ireland firms.
Managing director Tom Verner said:
“One of the biggest issues with companies in Northern Ireland claiming their full R&D tax relief, is that many believe R&D Tax Credits are only available for traditional research sectors and ‘white coat' industries. Interestingly, the statistics show that local SME's are driving the growth in claims, accounting for 82 per cent of Northern Ireland's total R&D Tax Credit claims."
"These claims are so important in encouraging companies to innovate and by not taking advantage of this available tax relief, Northern Ireland firms risk stagnating their growth and restricting their competitiveness which effectively holds back our overall economy. Relief can be in the form of cash, or a reduction in corporation tax liability," he added.
The HMRC statistics for 2016, released this week, show a high percentage of claims in sectors traditionally associated with R&D Tax Credits with the manufacturing sector accounting for 28 per cent, information and communication sector 26 per cent and the professional, scientific and technical sector with 20 per cent of claims across the UK.