Firms Must Dip into HMRC's R&D Pot of Gold
CHANCELLOR of the Exchequer Philip Hammond last month announced a bumper £2 billion a year increase in research and development funding for UK businesses during his autumn statement.
Great news, right? Totally.
What this actually means is the Government is making £2 billion available for companies to innovate, grow, create new jobs and add wealth - the opportunities of this tax relief are endless.
This news, delivered in the shadows of the aftermath of Brexit and the US election, was like a shining light of hope and encouragement for businesses who quite frankly need a confidence boost right now.
In a speech delivered a few weeks ago, Prime Minister Theresa May said she wants to make the UK the "global go-to place for scientists, innovators and tech investors" and is hoping the £2 billion pledge will put the UK at the forefront of research and development.
As it currently stands, the initiative is really working as evidenced by Government research which highlights that, for each £1 spent on R&D Tax Credits, between £1.53 and £2.35 of additional investment in the UK was stimulated.
May described her aim "not simply for the UK to have the lowest corporate tax rate in the G20, but also one that is profoundly pro-innovation".
The thing is though - there has always been a pot of money for the HMRC's R&D Tax Credit scheme and businesses have been taking advantage of it. This further £2 billion is a phenomenal commitment to innovation.
The latest HMRC statistics which were published a few months ago showed an increase in Northern Ireland businesses engaging with the R&D Tax Credit scheme. A total of 610 businesses here took advantage which equated to £25 million of money being poured back into companies for growth and further innovation. There were 190 more businesses successfully submitting R&D claims in 2015 than in 2014.
With the pending implementation of Article 50, this post-Brexit period is a fantastic time for innovative and developing companies to apply for R&D tax credits.
Regional trends show that, although the majority of R&D Tax Credit applications are concentrated in the south-east of England and London, Northern Ireland still lags behind our UK counterparts.
We are very good here in Northern Ireland of keeping our heads down and cracking on with the job in hand that sometimes we forget to raise our heads above the water and look at our own businesses.
It's time now to raise our heads and take notice of this lucrative initiative. If you don't it could cost your company hundreds of thousands of pounds.
There's one thing I hear from companies all too often. They don't think they are doing any research and development. This is one reason why we are falling behind the other UK regions. R&D tax relief is not just for the 'white coats'. We need to get that notion out of our heads.
You can be creating a new process, product or indeed service. You can be making improvements to an existing service or using science and technology to duplicate existing processes, products or services.
Northern Ireland has the potential here to be the "global go-to place for scientists, innovators and tech investors".
There are so many businesses doing great things. But, credit where credit is due. Get your share of Mr Hammond's pot of gold. After all, it's there for the taking.
The above article by Momentum Group's Managing Director Tom Verner was featured in the Irish News on the 13th December 2016.
To find out more about R&D Tax Credits contact Momentum on 028 9140 4030 or send an email to email@example.com