New statistics published by HRMC reveal that a total of £70 million was paid out to UK Financial & Insurance firms in research and development (R&D) Tax Credits, up from £55 million according to statistics released this time last year.
The number of claims has also jumped from 680 to 800 but still only represents 2% of all claims across the scheme.
The figures were released as R&D Tax Credit specialists, The Momentum Group launched its ‘Rebound’ support service which aims to assist businesses by maximising their uptake of all available grants and R&D tax benefits offered by the UK government.
Commenting on the latest statistics, Tom Verner, MD of The Momentum Group said; “These new figures for the Financial & Insurance industry are welcome and reflect increased innovation specifically in areas such as Fintech and the rapidly changing insurance models being created for a radically changing world.
“However, the industry still only represents 2% of claims across the scheme and we believe there are still a great many innovative Financial & Insurance companies missing out on potentially tens of thousands of pounds in R&D Tax Credits.
“The ‘Manufacturing’, ‘Professional, Scientific and Technical’, and ‘Information and Communication’ sectors continued to have the greatest volume of claims, making up a total of 66% and 71% of the total monetary amount claimed for 2018-19.”
Mr Verner added; “The launch of our Rebound support service comes in response to the dual challenge for businesses operating under the looming threat of a no-trade deal Brexit and an ongoing global pandemic. We are all in this together and at Momentum we have been offering, and will continue to offer, free claims advice to companies during these pressured times.
“We believe in the ‘bouncebackability’ of businesses across the UK. That word was first coined by Crystal Palace manager, Iain Dowie when describing how his team went from the fringes of relegation to being promoted and I am confident Momentum can help businesses look to a brighter future after the unparalleled difficulties of 2020.”
To further underline the commitment to research and development support, at the last budget Chancellor, Rishi Sunak pledged to increase spending on overall R&D to £22billion per year by 2024-25.
Mr Verner said; “Between the £38billion spent by the Government on Bounce Back loans for businesses affected by the Covid pandemic, and the potential tax relief that can be claimed in R&D, there is so much support for businesses out there but awareness and understanding of the latter remains stubbornly poor.”
“But often in uncertain times, businesses are driven to be more innovative and this work can qualify for R&D Tax Credits. 2020 has been an incredibly difficult year for business with Covid-19 generating great uncertainty and it is likely the monetary value of claims will be lower in the next period due to issues such as staff being on furlough. However, in our view, it is vital that companies thoroughly examine their R&D activities now to ensure all opportunities for support are explored.”
“For example, a number of companies joined the fight against Covid-19 by switching production to make medical items, PPE and hand sanitiser. This work will have required a degree of R&D and it is right these companies receive the financial support they are entitled to.
“In addition, the government has committed to processing claims within 28 days, meaning successful claims could have an immediate positive impact on balance sheets at a time when cash flow is critical.
“Momentum can help, we recognise that businesses will know their own sectors inside out but often struggle when it comes to understanding what qualifies for R&D Tax Credit claims.
“Our Rebound support service aims to work directly with companies to conduct strategic reviews of their business before putting strategies in place to identify wide-ranging R&D and innovation opportunities.”
To learn more about R&D Tax Credits available to companies and to calculate how much you could receive visit: https://www.momentumgroupni.com/