HMRC Statistics on R&D and Patent Box Reliefs

HMRC have published statistical analysis of companies making R&D and Patent box in their company tax returns received on or before 30 June 2020. These numbers show continued percentage increases in the number of claims and value of support provided through R&D and Patent Box tax relief. The total number of claims for R&D tax credits for 2017-18 was 62,095, an increase of 17% from 2016-17. We haven’t seen the type of exponential growth year on year that we would have expected from 2015/16 we have seen a slow in the growth of claim numbers (2015/16 (23%), 2016/17 (21%)). Will the Government’s ambitious target of £22 billion of public funding for R&D per year by 2024-2025 be met? Will Manufacturing industry continue to benefit the most from these reliefs in a post COVID world?

The figures show as of 30 June 2020, there have been 59,265 R&D tax credit claims for 2018/19 this compares to 62,095 for 2017/18. The total cost for 2018-19 is expected to rise as more claims are received and processed by HMRC. Based on the timings of claims received in previous years, they estimate that the final cost for 2018-19 will be £6.3bn, rising from £5.1bn for the 2017-18 period.

The Patent Box data shows as of 30 June 2020 1,230 companies have claimed relief under the Patent Box scheme, with a total value of £992 million. If the proportion of late claims are the same as in previous years then the total value of claims for 2018-19 is likely to be £1,130m. This is an increase from £1,101 for the 2017-18 period. Over the periods since its introduction, the value of relief has increased as the rate has been phased in, with that growth slowing in 2017-18, the first year where the relief is fully phased in.

The information contained in this article is intended to provide general information only and is not an exhaustive treatment of the subjects. accordingly, the information in this publication does not constitute accounting, tax, legal, investment, consulting or other professional advice or services. before making any decision or taking any action based on the information contained in the publication, you should consult a qualified professional adviser.