Business advisory firm Grant Thornton has helped local firms recoup more than £10 million of tax relief from Research and Development (R&D) spending in the past 18 months.
The money is reclaimed through a government scheme that allows companies to reduce their tax bill or claim payable cash credits on the proportion of their expenditure incurred on qualifying R&D activities and this figure is expected to increase significantly throughout 2021 as companies explore new ways to improve cashflow.
Peter Legge, Tax Partner at Grant Thornton in Belfast, said the surge in demand follows the building of a specialist Tax Reliefs and Incentives team at the firm, providing advice across a range of allowances for businesses.
He said: “Companies in Northern Ireland are leading the way in R&D across a wide spectrum of sectors. Working with clients in industries as diverse as construction, manufacturing, technology, engineering, pharmaceuticals, and many others, we are helping them to realise significant allowances. By maximising the available tax reliefs and in turn reducing their tax liability, we are empowering businesses by releasing money that can then be invested in other areas.”
Tax credits for R&D were first introduced for small and medium firms in 2000 with a scheme for larger companies following two years later. With many businesses sustaining a major decline in turnover due to the Covid-19 lockdown, many have adapted their services or introduced innovations enabling them to keep trading, diversified into new production lines or brought forward automation plans.
Peter said companies embarking on such programmes could avail of tax reliefs that will significantly improve cash flow.
“In this time of uncertainty, R&D tax credits and other tax reliefs could be an invaluable source of funding for many businesses to reduce tax liabilities and generate funds,” he added.
We have worked with a lot of clients, throughout the pandemic, that have typically sought to diversify and de-risk their business through development of innovative new products or sought to drive increased efficiency. Such projects have ranged from those businesses which have adapted their processes to manufacture PPE to those who are investing in robots to increase automation across their workplace.
“Typically, projects that qualify for R&D tax relief are those that seek to advance knowledge in any given industry, with a focus towards overcoming issues that enable the improvement of products and processes.”
Keep up to date with the latest news and views on the NI job market and more by following the nijobfinder blog.
Follow nijobfinder on Facebook, Twitter and LinkedIn to see the latest jobs and to ensure your dream job won’t pass you by.