New HMRC statistics show an increase of 688% in the amount of R&D tax relief savings being claimed by West Midlands companies over the last seven years.
The latest figures reveal businesses in the region accounted for 9% of the total value of claims made across the UK in the year 2016-2017, according to Birmingham-based Jumpstart.
They also show 3,340 claims secured here so far for the latest 2016-17 period with 2,905 being made by SMEs, accounting for around £110m in tax rebates with the remainder claimed under schemes for large companies.
Also released were figures for Patent Box claims, another tax relief available to help firms develop intellectual property (IP) assets. West Midlands businesses accounted for just 1.9% of the value of all Patent Box claims, which amounted to a £942.5m in tax breaks for companies across the UK.
There is also a strong focus within manufacturing, where 25% of all R&D tax relief claims were made, securing 29% of the total claimed.
Companies listed under the Information & Communication’ sector made 26% of claims (20% of total amount claimed), while those in the ‘Professional, Scientific & Technical’ accounted for 19% of the number of claims and 24% of the amount of overall relief secured across the country.
Antony Beak, Business Development Manager for Jumpstart in the West Midlands, said: “While the overall increase in the number of claims being made by businesses in the region is encouraging, West Midlands companies are lagging behind in the value of the claims they are making. The revised 2015-16 statistics show the region having one of the lowest averages (£34,586) for SME R&D claims with no improvement in these latest figures.
“It’s important for our companies to ensure they are not missing out and are claiming everything they are entitled to under the scheme – especially with HMRC increasing its scrutiny over R&D tax relief claims.
“Businesses should ensure they have the right expertise and support to ensure their technical project activities and expenditures are being accurately interpreted against government legislation.”
Introduced in 2000, R&D tax credits are designed to drive competitiveness in British business by incentivising companies to invest in innovation. The latest stats show that 240,000 claims have been made since that time with £21.4bn in tax relief claimed.