77% of engineering firms missing out on R&D tax credits

R&D tax credits for engineering firms

For UK engineering firms, the opportunity to benefit from research and development tax credits represents a fantastic means of reducing your Corporation Tax bill or even receiving a cash injection should you be experiencing a period of loss-making. As such, ensuring you’re one of those taking advantage of the scheme is essential and not one of the 77% currently missing out.

This startling figure – discovered as part of a Census wide survey in 2017 – is an eye-opening indication of just how many engineering firms are failing to seek and receive the just rewards for the investment they’re putting into research and development. With so many businesses being unaware of the benefits of the scheme, it pays to remind business owners that such opportunities can prove invaluable to the operations of their company.

How much are R&D tax credits worth?

It’s estimated that the average value of R&D tax credits for an SME business in the UK is more than £60,000. Plus, with the value of engineering business claims in the region of £40,000, there are substantial savings to be made on Corporation Tax for eligible businesses.

Making a claim

Calculating the value of a claim means taking into consideration a number of factors. First and foremost, understanding whether your work is eligible for making a claim is essential. While it isn’t a case of having a team of scientists working behind the scenes on your projects, you have to be able to demonstrate that you were looking to overcome an uncertainty in pursuit of the advancement of science and technology, and that this could not easily be worked out by another professional in the field.

Once you have determined whether your R&D work fulfils this criteria, you should assess your eligibility for the appropriate tax credits scheme. Businesses employing fewer than 500 employees and with turnover of less than €100m (or a balance sheet total under €86m) will be able to claim up to 230% on qualifying R&D costs. Companies larger than this, meanwhile, can take advantage of the slightly less generous RDEC scheme.

Don’t miss out on engineering R&D tax credits

It pays to regularly assess the nature of work undertaken by your engineering business. Being able to identify projects that are eligible for tax engineering credits could well present the opportunity to benefit significantly from government grants. This may well prove the difference between continued operations or the winding up of your business.

The best means of identifying whether your engineering company is eligible for such tax credits is to work alongside experienced R&D tax experts. Avoid being among the 77% of UK engineering firms currently overlooking the opportunity to benefit and follow the expert advice of professionals to ensure you don’t miss out on the rewards your company deserves.