The HMRC published the statistics on 15 August 2013 for the uptake of the research and development tax relief in the UK.  This tax relief allows an enhanced tax deduction for expenditure on research and development. In the case of large companies this has been 130% of the expenditure, and in the case of small and medium enterprises (SMEs) it is 225%. A new regime (currently optional) for large companies from 1 April 2013 gives them the chance to elect for an “above the line” credit of 10% of their R&D expenditure. This will replace the current large company R&D tax relief with effect from 1 April 2016.

The statistics show that 12,190 claims for R&D tax relief were made in 2011/12. Of this amount, there were 6,710 claims by SMEs for an enhanced deduction and 790 claims for an actual repayment of the credit, which is possible under the scheme for SMEs. There were 500 claims for R&D tax relief under the large companies’ scheme made by SMEs working as contractors for large companies.

A total of GBP 1.2 million was claimed in R&D tax relief in 2011/12, of which GBP 420 million related to the SME scheme and GBP 780 million related to the large company R&D tax relief. Most of the claims related to companies with registered offices in London, the east of England and the south east, although these were not necessarily the locations where the R&D was carried out.

There is also a provision for Vaccine Research Relief, which until 1 April 2012 operated on similar lines to the R&D tax relief. There have been around 10 claims for this relief each year since its introduction in the year 2003/04, and the relief claimed has amounted to less than GBP 3 million per year. Since 1 April 2012 the vaccine research relief for SMEs has been removed and only large companies may claim a tax credit in respect of vaccine research.