New research has revealed that engineering companies in the UK are potentially missing out on over £10 billion of R&D funding each year.
The study, commissioned by ‘innovation specialists’ MPA for the Advanced Engineering 2019
exhibition and conference, found that 21% of ‘innovation-active’ engineering firms are not taking advantage of the Government’s R&D Tax Credit scheme, which allows companies to claim back up to 33p for every £1 spent on R&D activity.
The research shows that, on average, engineering companies invest £386,000 a year on R&D activity, so they are potentially able to claim £100,360 in funding.
With over 100,000 UK engineering firms not claiming, despite describing their company as innovation-active, this could mean that £10.2 billion is going unclaimed each year.
Reasons for not claiming the funding vary, but the most common answer given by engineers is that they do not believe their companies are eligible.
The research also reveals that many engineering companies probably qualify without them realising.
Another barrier blocking engineers from claiming is a lack of awareness about the initiative. Some 24% of the surveyed engineers who are not claiming admitted they did not even know that the scheme exists.
Even among those who think they are innovation-active, 7% said that they were completely unaware of R&D tax credits.
Nigel Urquhart, senior technical analyst at MPA, said: “Engineering companies in the UK are respected all over the world for their quality and innovation, but a worryingly low number of them are claiming the R&D funding they are entitled to.
"Our research has highlighted that more work needs to be done to raise awareness of the R&D Tax Credit scheme, as these innovative companies could save themselves hundreds of thousands of pounds.
"This money could then be reinvested to fund further innovation, which would ensure that UK engineering stays at the forefront of the industry.”
Further details can be found at the Web site (www.mpa.co.uk/services/rd-tax-credits