In newly released government statistics, the total of Northern Ireland’s R&D tax credit claims comes to £55m in the last tax year. This is a huge sum of money, but compared to other regions of the UK, this is actually a small amount of R&D tax credits.

How does Northern Ireland compare to the rest of the UK?

Regarding claiming R&D tax credits, Northern Ireland is lagging behind the rest of the UK. For example, the West Midlands total is £295 and South East England is £660m for the same time period. Northern Ireland’s £55m is only 2% of the government’s overall R&D tax credit spend.

The average value of a Northern Irish SME’s R&D tax credit claim is £46,000. The UK average R&D tax credit claim is worth £61,514.

Why is Northern Ireland missing out on its R&D tax credits?

This is a very important question that HMRC are trying to address. Given the low proportion of the R&D tax credits total, it will come as no surprise that only 3% of the R&D tax credit claims received are from Northern Ireland. So, the low number of claims actually submitted are part of the issue. We need to dig a bit deeper to see why Northern Irish businesses aren’t even applying for R&D tax credits.

Known strengths of Northern Ireland’s economy are innovative agri-technology and manufacturing. Both of these industry sectors have an excellent track record for successful R&D tax credit claims.  There is a serious opportunity for substantial investment in future innovation through the R&D tax credit scheme.

Are R&D tax credits for you?

The reasons for Northern Ireland’s lack of applications and smaller average pay out are similar to the rest of the UK:

  • Not knowing that this corporation tax relief exists.
  • Assuming that their projects are not eligible under R&D tax credit rules because they are not in the science or technology industries.
  • A non-specialist has put together the claim and missed out some qualifying costs, reducing the overall amount paid.
  • They have not realised the potential value of a claim and dismissed an initial look at the process as not worth the hassle.
  • Are put off by the paperwork and evidence collection elements of an R&D claim.

There is such an amazing opportunity for businesses in Northern Ireland to boost their own growth with R&D tax credits. Once you get your head round the rules, it’s actually a very accessible tax relief. Companies from every industry sector are allowed to apply, as long as their projects meet the eligibility criteria. Incredibly, being awarded your R&D tax credits isn’t success based. You are being reimbursed for trying to find a solution to a problem, regardless of the outcome of your project.

Hopefully we’ll see Northern Ireland with a larger piece of the R&D tax credit pie by the time next year’s figures are released.

If you need any help with your R&D tax credit claim, from establishing your eligible projects to finding every qualifying cost, give us a call on 0330 0539 112.


Jamie Smith