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HMRC R&D Tax Credit statistics: September 2020

Each year, (around September/October) HMRC release in-depth statistics on Research and Development (R&D) Tax Credit claims that are being made throughout the year.

Within this article we will explore the key information that we can see and see what this means for the industry as a whole.

What can we tell from the latest HMRC R&D Tax Credit statistics?

First off, let me caveat by saying that due to the timing of the release, we can’t see the entire accounting period. However, in 2020’s R&D Tax Credit Statistics, we can see some interesting patterns emerging in the increasingly popular R&D Tax Credit schemes.

It’s great it is to see an increasing number of companies make use of Research and Development (R&D) Tax Credits, to help fund vital projects and push the boundaries in their respective industries.

Over the years, we have seen some incredible projects by our clients, you can find a few of them highlighted in our Case Studies and it’s this constant innovations that will help lift us out of recession.

HMRC R&D Tax Credit Statistics: September 2020 – key points

  1. 62,095 claims made

    This is a 17% increase on the previous year!
  2. 54,005 claims made by SME’s

    A WHOPPING 19% rise on last year.
  3. 8,085 claims made for RDEC ( Research and Development Expenditure Credit )

    7% up on last year.
  4. 10% increase in first time claims

    This equates to 15,750 new applicants.
  5. To date, over £33.3bn has been claimed in tax relief

    This is comprised of over 300,000 claims since the schemes launched in 2000-2001.

What can we read from the latest R&D Tax Credit statistics?

Value of R&D Tax Credit claimed - R&D tax Credit Statistics 2020

More SME’s are claiming R&D Tax Credits

Since HMRC removed the minimum threshold of R&D expenditure that company’s could claim relief on (al the way back in 2012), we have continued to see the number of SME’s claiming the tax relief rising. The latest statistics show that around a third of all SME claims are for under £10,000.

We’re also seeing an increasing number of high value claims. As a result of these, claims with a value of over £50,000 account for most of the £2.9bn that was awarded as tax relief.

Amount claimed in R&D Tax Credits 2020

The highest volume of claims are valued under £50k

Overall, the general trends are positive. More businesses are accessing R&D Tax Credits, with the lions share of claims that are being made are for values under £50,000. However, (not shown in the graph) the largest concentration in amount, is in the “over £2m” band.

Industry Sector analysis of R&D tax credit claims, 2018-19

The following image shows a detailed breakdown of the industries claiming R&D Tax Credits, along with the overall value of relief being awarded. As with previous years, Manufacturing, Information & Communications (which encompasses computing and software), along with the Professional, Scientific and Technical sectors are making the majority of claims.

Beakdown of R&D tax credit being claimed per industry - HMRC statistics 2020

How do the different regions of the UK compare?

As we can see from the following image, there is a big difference in the number of claims in each of the UK’s regions. Now, it’s worth noting that this is the location of the registered office and not necessarily where the R&D takes place.

R&D Tax Credit claims being made per UK region

Scotland

  • SMEs – 2,405
  • RDEC – 215
  • SME’s claiming RDEC – 310

N. Ireland

  • SME – 1,400
  • RDEC – 85
  • SMEs claiming RDEC – 130

Wales

  • SMEs – 1,795
  • RDEC – 70
  • SMEs claiming RDEC – 135

England

  • SMEs – 46,445
  • RDEC – 2,940
  • SMEs claiming RDEC – 3,225

Research and Development (R&D) Tax Credits are continuing to provide a valuable cash injection to companies within all industries.

As a company, we’re proud of the part that we play in promoting Research and Development Tax Credits and in helping businesses to access this funding.

With the current pressure that Covid-19 is placing on businesses, R&D Tax Credits play a real and tangible part in the recovery process. Business owners are clearly seeing (and reaping) the benefit, now more than ever.

Why not contact us today to discuss your business’ R&D tax relief? It only takes our team around 20 minutes to determine if you are eligible or not.