The likely culprit behind the flattening average claim values is the very high number of small value claims being made. Over three-quarters (77%) of SME claims are worth less than £50,000 and surprisingly, 18% of all claims are worth less than £5,000.
This doesn’t match our own experience. Carrying out R&D is an expensive activity, and so this proportion of very small claims is very surprising. It is hard to believe that so many SMEs are spending less than £10,000 annually on R&D.
It could be that these SMEs are nervous about the process and make a small claim. They are sometimes advised to do so, in error, in the hope of mitigating the risk as HMRC pushes for quality. Our concern for those claiming is that we have seen a recent spate of adverts from spurious advisers mislabelling what constitutes R&D.
Just because a claim is small doesn’t make it high-quality. If you are an SME and you’ve made a very small R&D tax credit claim, we’d recommend choosing your adviser wisely to ensure your business is protected and receiving what it is due.