Clarity Consulting

Growth in research and development in 2017

According to the latest data published from the Office for National Statistics (ONS), businesses in the UK spent £23.7 billion on research and development (R&D) in 2017. 

Key findings from the ONS highlight that: 

  • Year-on-year expenditure on R&D increased by £1.1bn – or 4.9%, compared to statistics for 2016. 
  • The pharmaceutical sector continued to have the highest level of R&D spending of all product groups at £4.3bn.
  • Software development businesses increased expenditure on R&D by 34.7% – to £1.4bn and a 6% share of all R&D spending in 2017. 

The government has a target of increasing R&D investment to 2.4% of GDP by 2027, with a longer-term goal of 3%. To support this aim, generous tax credits are available on qualifying expenditure. 

SME R&D relief allows companies to deduct an extra 130% of their related expenditure on salaries, consumables and sub-contractor costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction. 

If you can answer ‘yes’ to the following questions, there is a good chance you will qualify for the tax credit: 

  • Are you engaged on an innovative project?  
  • Does the project have a defined start and projected end date? 
  • Is it in a field of science or technology? 
  • Is the work you are doing improving what is currently available in the market place? 
  • Are you pursuing a scientific or technological advancement? 
  • Is there a degree of scientific or technological uncertainty involved? 
  • Is the knowledge or capability involved not readily available or deducible by a competent professional? 
  • Are you spending time investigating and testing the results? 

Get in touch 

If you think that you may qualify, talk to us about claiming R&D tax credits – call one of our team on 01483 205850

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