HM Revenue & Customs (HMRC) reports show that they have under reported the number of companies making Research and Development tax claims.
The comparison between the 2017 and 2018 HMRC Research and Development Tax Credits Statistics show that a huge amount of company claims was under reported between 2015-2016.
The HMRC statistics, that are written up yearly, provide information on the number of companies claiming Research and Development tax credits and the cost of providing that support.
The 2017 report states that the total number of claims between 2015-16 rose to 26,255, an increase of 19% from 2014-15. However, the 2018 report states that the number of claims between 2015-16 was at 43,040, an increase of 22% from 2014-15. This shows that 16,785 claims were previously missed off the 2017 report. No reason is given for this in the report.
Manufacturing is one of the largest industry sectors, and is one of the sectors where the number of claims is in correlation with the amount claimed. It has the greatest volume of claims of any industry sector, making up a total of 27% of claims and 30% of the total amount claimed for in 2015-16.
Managing Director of R&D Tax Claims, Mark Evans stated:
“The HMRC statistics show that they have under reported a number of companies making R&D tax claims by a massive amount. If you compare the 2017 report with the restated figures in 2018 report, the understatements are huge. Whatever the reasons for this, the fact remains, in the current climate of uncertainty, claiming R&D tax relief is more important than ever for the UK companies as a whole and for the manufacturing sector in particular.”
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