A few weeks ago we wrote about the increase of research and development (R&D) tax credits in the Yorkshire and the Humber region but research has also shown that R&D tax credits are helping to encourage R&D in the UK.
Why are companies offered R&D tax relief?
A briefing by four national academies describes how tax relief for R&D is offered under the R&D tax credit scheme. The government has implemented R&D tax credits in order to help encourage and boost investment into R&D in the UK as a way of reducing the cost of it. It forms part of a wider strategy called the Industrial Strategy which sets a target of increasing it by 2.4% of the GDP by 2027.
The UK lags behind other countries in this area and as such the government is trying to stimulate R&D activity through a variety of mechanisms alongside R&D tax credits which include Innovate UK Schemes, Small Business Research Initiative, Industrial Strategy Challenge Fund, European Regional Development Funds, Enterprise Investment Schemes, Venture Capital Trust and British Business Bank.
How does the UK compare to other countries?
The report highlights how the uptake of R&D tax credits varies greatly by region with the greatest uptake in London and the South East. It also compares the UK R&D incentives against other countries and how they differ.
In Europe, France has similar uptake issues as the UK with levels varying geographically across its regions. Germany no tax policy to support R&D at present but they are looking to implement one, and Iceland and Norway don’t include basic research in their tax policies. In the Netherlands and the US, they allow newer businesses and start-ups higher tax reliefs. This is supported by a review by the European Commission which shows that the impact of this incentive is greater for younger businesses and SMEs.
Further afield in Asia, Japan has expanded its definition to include the service sector in 2017 and they allow equipment and machinery costs to be claimed. South Korean offers a higher rate of relief for specific industries and technologies, and they also encourage year on year spend with higher rates.
But what many countries are all struggling to grasp is how to define and keep up with evolving technologies and to articulate their schemes in a way that businesses can understand their eligibility to increase the uptake of the incentive.
Could you benefit from R&D tax credits?
If you think your business is eligible for R&D tax credits, contact us and we will do a free, no obligation assessment of your business. As technical experts, we understand R&D tax credits as well as how businesses work. We can very quickly ascertain whether a claim is worth making and we often find eligibility where others don’t or greater value than most expect.
If your business is eligible, we can do all the hard work for you so you can concentrate on your business. We don’t charge upfront fees and we are so confident that we can make a successful claim that we only charge you if it is successful and only when the money is received so you won’t even be out of pocket.
There really is nothing to lose in contacting us for a free, no-obligation assessment. To find out more contact TEQ Group today on 01423 815299 or click the button below and we’ll be happy to offer some advice.