New statistics, taken from a manufacturing industry survey by 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 £2 billion annually, only 59% of UK manufacturers questioned have claimed R&D tax credit, highlighting that 41% of manufacturers are not claiming and 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. Innovative development of new or improved products, processes or systems developed via new methods or techniques could be eligible. 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% of companies surveyed felt very confident that they could access R&D credits or business grants, with 11% uncertain of their company’s eligibility.
Commenting on these findings, Tom Morgan, RSM’s head of manufacturing in the south west, 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.”