Here are the report’s main conclusions from HMRC.
The total number of claims increased by 7%.
According to several predictions, the pandemic, which forced companies to close, may have been expected to influence the number of claims. Therefore, it’s intriguing that there have been 7% more claims than last year.
SME claims for the RDEC scheme have increased by 20%, making up most of the increase. This suggests that more companies were looking for financial assistance overall and that SMEs may have been more aware of things like grant financing or making claims under the RDEC system.
The average claim size has decreased.
Again, covid likely influenced this because it prohibited businesses from doing their typical amounts of R&D work.
Only a few sectors—including most regions and industries—have seen a rise in claim value. This is notable since these industries would be considered “important employees” during the pandemic and may have escaped the more severe consequences of the pandemic. Agriculture, electricity, gas, steam, and air conditioning appeared to have avoided the decline in claim size.
Less expenditure – falling 11% in 2021-21.
The investment for R&D at this time is significantly lower than in the previous year, as was predicted, partly due to the pandemic starting in 2020, which caused staff to be furloughed and business closures to happen.
“Around £38.1 billion was expected to be spent overall in the year ending March 31, 2021.”
This number shows an 11% drop from the previous year.
While 10,475 enterprises submitted claims under the RDEC programme, most of these claims (78,825) were made through the SME R&D programme. However, some of these claims were made by SMEs under the RDEC programme since the qualifying R&D had been outsourced to the claimant companies.
The Information and Communication sector is making the most claims.
Businesses in the technology and communication sector, which is recognised for their innovative expenditure, have continued to have the highest amount of shares.
Up to 22% of all claims were filed by the information and communication sector.
Followed by manufacturing and professional, scientific and technical sectors.
Additionally, for the second year in a row, the manufacturing, professional, scientific, and technological sectors, which account for 25%, 23%, and 22% of the total amount claimed, correspondingly, have the highest concentration of claims.
The top claiming sectors are:
- Information and Communication – £73,000 average claim size
- Manufacturing – £79,800 average claim size
- Professional, scientific and technical firms – £95,000 average claim size
There we have it, this year’s R&D tax credit statistics!
There have also been several legislative changes to R&D Tax Credits this year. To find out more about these, click here.
It has never been more crucial to proactively evaluate your claim and submit it accurately, especially with HMRC scrutiny at an all-time high. Green Jellyfish helps businesses across the UK to claim R&D Tax Credits. Are you eligible? Contact us today to arrange a no-obligation phone call.