Companies in Northern Ireland continue to miss out on tens of thousands of pounds of Research and Development (R&D) Tax Credits, according to R&D Tax Credit specialist the Momentum Group who were responding to the latest figures released this week by HMRC.
The Momentum Group was responding to research which shows that despite R&D Tax Credits aiming to drive innovation, Northern Ireland continues to fall behind nearly every other region in the UK, with local companies claiming a total amount of £45m in 2016.
The analysis indicates a positive trend for Northern Ireland with an increase of 29 per cent in the total value of Tax Credits claimed since 2015, compared to the UK average of 19 per cent, according to the Momentum Group managing director, Tom Verner.
However, it is still significantly below other regions such as South-East England which secured £570m in R&D tax claims and West Midlands which claimed back £230m. Furthermore, the average received per R&D tax claim by companies in Northern Ireland was only £57,000.
Overall, Northern Ireland accounted for just 3 per cent of total claims and 1.6 per cent of the total tax benefits claimed.
This research provides evidence that many companies in Northern Ireland continue to miss out on this valuable tax relief initiative, and according to local R&D Tax Credit specialist the Momentum Group, this is due to a number of reasons. These include a lack of awareness and not understanding which activities and costs qualify for this purpose.
HMRC statistics for 2016, released today, show a high percentage of claims in sectors traditionally associated with R&D Tax Credits with the manufacturing sector accounting for 28 per cent, information and communication sector 26 per cent and the professional, scientific and technical sector with 20 per cent of claims across the UK.
Momentum Group Managing Director, Tom Verner, commented: “One of the biggest issues with companies in Northern Ireland claiming their full R&D tax relief, is that many believe R&D Tax Credits are only available for traditional research sectors and ‘white coat’ industries. Interestingly, the statistics show that local SME’s are driving the growth in claims, accounting for 82% of Northern Ireland’s total R&D Tax Credit claims. This is positive for SMEs in Northern Ireland which need all the help they can get.
“As the only local company specialising solely in R&D Tax Credits, Momentum partners with every sector in manufacturing, from engineering, food and drink, digital and technology, and everything in between, to ensure they claim what they are legitimately entitled to.” he continued.
Tom added: “These claims are so important in encouraging companies to innovate and by not taking advantage of this available tax relief, Northern Ireland firms risk stagnating their growth and restricting their competitiveness which effectively holds back our overall economy. Relief can be in the form of cash, or a reduction in corporation tax liability.”
The Momentum Group is a locally founded company that has been working hard to raise awareness of R&D Tax Credits amongst companies in every sector. Recent rises in R&D Tax Credit claims in Northern Ireland are likely, as a result of the Bangor-based company’s success in preparing R&D claims on behalf of its clients. Momentum is successfully working with leading accountants, banks and financial institutions and many others across Northern Ireland to raise the profile of this generous tax relief.
The R&D specialists are calling on all Northern Ireland businesses and their accountants to take action this year to explore this valuable incentive, and make Northern Ireland as competitive as the other UK regions covered in the HMRC report.
For more information on The Momentum Group visit www.momentumgroupni.com