Welsh companies are beginning to make ground on their UK rivals in taking advantage of vital research and development tax relief schemes, according to specialist tax adviser Denise Roberts from Broomfield and Alexander.
The latest statistics from HM Revenue and Customs show that 675 claims for research and development tax relief were made by companies registered in Wales during the 2014-15 tax year. Overall, this represents a 16% increase from the previous tax year and equates to approximately £10m more being claimed as a result, returning around £35m to companies registered in Wales.
The number of UK claims rose by almost 10% year-on-year, with sectors such as manufacturing and telecommunications continuing to lead the way and, while the value of those claims increased by 27%, this compared to a 40% rise in Wales. However, the latest figures also underline that Welsh companies still have a long way to go if they are to catch up with other regions.
Apart from Northern Ireland, every other region the UK recorded a higher number of claims according to the latest statistics, with Scotland (1,200) and Yorkshire and the Humber (1,275) the nearest two regions to Wales in the national league table.
“While there is evidence to suggest that companies in Wales are no less innovative than those in other regions, it appears that many of them have historically been unaware that these incentives exist or aren’t sure whether they can benefit from them,” according to Denise Roberts.
“The current schemes for tax relief have been providing much needed help to fund research and innovation throughout the UK since its creation at the turn of the millennium and the concern is that Wales could be benefiting from far higher levels of relief and generating returns that could be re-invested into further research and development activity.”
By making the most of the tax relief schemes, companies can claim more than 25 pence in every pound back, which can go towards funding further development that helps place the UK as a whole as a world-leader in state-of-the-art research. The benefit of such research has been clearly evidenced recently, with Oxford claiming the top spot in the world University rankings
Ms Roberts added; “It is key to a prosperous Welsh economy that firms continue to invest in new and innovative ideas, as only then will we realise our ambitions as a country. I would urge companies to ensure that they are getting the right tax advice to help them ensure that they benefit fully from the schemes that have been put in place by the UK government to encourage innovation through sustained investment in research and development.”