AMENDED - New HMRC Specialist Unit to increase support for Research and Development in South West England

3 Nov 2006 02:15 PM

Amended Copy

HMRC has opened a network of seven new specialist R&D tax credit units across the country, including one in Southampton for the South West region.

The new unit will be particularly aiming at making it easier for Small and medium enterprises (smes), to take advantage of R&D tax credits.

SMEs in all sectors can now benefit from improved customer services and a wider range of business-orientated support. A key feature of the Southampton unit's activities will be to do more outreach work. The unit's staff will now visit companies to help identify areas of their business that could benefit from R&D tax credits and working with them to produce higher quality applications.

John Healey, Financial Secretary to the Treasury said:
"R&D tax credits are playing a crucial role in encouraging innovation in UK businesses with more than £1.8bn having already been claimed, since April 2000.

"We are keen to build on this success and by setting-up these units with 70 officers to specialise in R&D claims, both HMRC and companies will benefit from the pooling of skills, expertise and experience. "

The Southampton unit will also act as a recognised point of contact for businesses wanting to enquire about R&D tax credits and will be run by HMRC staff who have undergone specialist training.

The other specialist units are located in: Cambridge, Croydon, Leicester, Maidstone, Manchester and Cardiff- which will act as central hub for dedicated teams of officers covering Wales, Scotland and Northern Ireland.

Companies can contact the Southampton R&D Unit office at: 8th Floor ,Queens Keep, 1 to 4 Cumberland Place Southampton, Hampshire SO15 2UN or by phoning- 02380 204253

Further info on R&D tax credits units is available online at: http://www.hmrc.gov.uk/randd/special-units.htm

Notes for editors

1. Research and development (R&D) tax credits are a company tax relief which can either reduce a company's tax bill or, for some small or medium sized companies, provide a cash sum.

2. The aim of the tax credits is to encourage greater R&D spending in order to promote investment in innovation.

3. Between April 2000 and April 2006 around 22,000 claims for R&D tax credits were made.

4. The R&D tax credit works by allowing companies to deduct up to 150% of qualifying expenditure on R&D activities when calculating their profit for tax purposes. Small or medium companies can, in certain circumstances, surrender this tax relief to claim payable tax credits in cash from the HM Revenue & Customs.

5. In December 2005 the Chancellor announced that the administration of the R&D Tax Credits for companies would be improved by creating specialist R&D units to deal with all R&D tax credit claims outside the Large Business Service (which deals with the very biggest public companies). Work has been ongoing since then to ensure that the units are operational and will deal with all new claims from 1 November 2006.

6. The Cardiff unit will have a small satellite office in Glasgow dealing with claims from companies based in Scotland.

7. HMRC staff due to work within the new units were provided with extra training in dealing with R&D in early October 2006, from Intellect, the software industry trade body and R&D specialists from the UK's Big 4 accountancy firms.

8. A longside the new units is a brochure of advice on R&D tax cedits by the Department of Trade and Industry- R&D tax credits- whats in it for you? - and the individual case studies - are available from the DTI publications orderline via e-mail from
publications@dti.gsi.gov.uk or by calling 0845 015 0010 or by download from the R&D pages of the DTI web-site:
http://www.dti.gov.uk/innovation/randd/randd-tax-credits/page11350.html

Issued by HM Revenue & Customs Media Relations Team
Website: www.hmrc.gov.uk/randd