Smaller firms in Scotland are being urged to consider claiming tax relief for research and development (R&D) – with schemes like this able to serve as a "lifeboat" – after such firms were found to lag behind UK peers, new data has found.
Tuesday, 27th October 2020, 7:00 am
Innovation funding consultancy Leyton, citing HMRC data, said that with 14 months still left to apply for 2018/19, £230 million has already been claimed by Scottish businesses – a fraction of the UK equivalent.
Scottish businesses received more than £75,782 on average for their 2017/18 accounts. However, only 3,035 made claims, compared to 12,365 in London, and 9,380 in the south-east.
So far for 2018/19 the average claim value stands at £80,341 with 14 months left to apply. Scotland has seen only 2,920 claims compared to 11,820 in London for that time period.
Leyton – which in the UK works with 6,000-plus companies of all sizes across many sectors – said that with financial support drying up for many sectors, it is clear that companies are turning to "well-established and reliable" schemes to bolster their cash flow.
The figures also show the number of small and medium-sized enterprises in the UK claiming increased by about a fifth to 54,005 for the year 2017/18 and there were 15,750 first time applicants for R&D credits in total – of which 13,935 were SMEs.
Leyton added that while the data does not attribute a cause to the increase in claims, coronavirus and Brexit may have encouraged companies to use any scheme available to them to generate or reinvest cash back into their businesses.
William Garvey, managing partner at Leyton UK, said: "It is great that more Scottish companies are utilising the R&D tax relief and we would urge others to look into the scheme.
«This year has been unprecedented and will cause long-term damage to our economy, but schemes like this can be a lifeboat for SMEs. Loss-making businesses can claim the relief and it can be done retrospectively for two financial years prior, so it really is a worthwhile and well-established scheme."
Leyton UK is part of the Leyton Group, an international firm with more than 1,500 people in 31 offices.
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Source: scotsman.com
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