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.