Northern Ireland firms claim £75m in R&D tax credits
A TOTAL of £75 million was paid out to businesses around the north in research and development (R&D) tax credits during 2017-18.
But while more firms are using the scheme, tax experts have claimed that smaller businesses are still losing out on potentially tens of thousands of pounds.
HMRC figures showed that Northern Ireland companies claimed just 1.7 per cent of the total funds paid out across the UK, representing just 2.7 per-cent of all claims.
Firms from here made a total of 1,310 claims, with the vast majority (1,100) claimed under the SME (small and medium enterprise) R&D scheme.
The average sum paid out to northern Irish companies was £57,250, with SMEs taking £41,000 on average. It represented an 11 per cent rise in the number of claims and a 13 per cent increase in the value paid out in the previous year.
But the figures revealed how more of Northern Ireland's biggest firms are now benefitting the most from the scheme.
HMRC's data showed a 25% increase in the number of claims, with a 150 per cent upsurge in monetary value.
Managing director of The Momentum Group, Tom Verner said firms from the north appeared to be waking up to the benefit of tax relief schemes.
“However, many SMEs are still continuing to hit the snooze button whilst larger companies are taking full advantage of the scheme. For the first time on a national scale, Northern Ireland's large companies are the big winners here,” he said.
“These latest figures from HMRC are a demonstration of once again how Northern Ireland companies are punching above their weight. When you drill into the statistics on a directly comparative level, Northern Ireland firms are holding their own against the rest of the UK. With Brexit looming, it is imperative that innovative firms – no matter what their sector – do not disregard what is in effect ‘money on the table'.”
On a UK-wide scale, the figures show a concentration of claims (68 per cent) in the ‘manufacturing'; ‘professional, scientific and technical' and ‘Information & Communication' sectors, with this making up nearly three-quarters (73 per cent) of the total monetary amount claimed.
Stephen Kelly, chief executive of Manufacturing NI, said: “Whilst it is encouraging to see an increase in the number of claims made by Northern Ireland companies, it is still surprising to see how much firms are missing out on.
“Every day we see incredible examples of innovation across the manufacturing industry in Northern Ireland. This is heavily underpinned by R&D – be it through investing in people and skills, new equipment, improved products or processes. Given the amount of challenges being presented by Brexit, incentives such as these could prove particularly useful for firms across Northern Ireland.”