New statistics, taken from a manufacturing industry survey by leading audit, tax and consulting firm RSM, reveal a large percentage of UK manufacturers are not taking advantage of research and development (R&D) tax credits to help support growth.
Despite increased government support totalling £2bn annually, only 59 per cent of UK manufacturers questioned have claimed R&D tax credit, highlighting that 41 per cent of manufacturers are not claiming, which highlights many could be missing out on valuable tax savings.
With the uncertainty of Brexit looming, financial assistance for companies that will support the UK’s economic prosperity is more important than ever. Therefore, unlocking cash from innovative development of new or improved products, processes or systems developed via new methods or techniques could be eligible to claim. In addition, as advanced manufacturing processes filter through the industry the opportunities to claim could increase – highlighting the potential to unlock more cash.
Nevertheless, according to the results of RSM’s UK Manufacturing Monitor, only 39 per cent of companies surveyed felt very confident that they could access R&D credits or business grants, with 11 per cent uncertain of their company’s eligibility.
Commenting on these findings, Anthony Steiner, audit partner and manufacturing specialist at RSM in Preston, said: ‘Accessing development funding is crucial to the prosperity of the sector, particularly at a time when Brexit negotiations could undermine the current EU funding streams available.
‘The £2bn R&D commitment from the government offers reassurance, but as our findings highlight, there is a lot to do to change business perceptions surrounding funding eligibility. The scope has changed and even if manufacturers have been rejected in the past, updated claim criteria or business operations could mean the application would now be successful, so it’s worth considering or Lancashire manufacturers could miss out on a potential cash injection.’