2017 proved challenging for many businesses, with a downgrade for productivity growth announced in the Autumn Budget, an increase in inflation and confusion caused by Brexit. Despite this, the outlook for the coming 12 months seems positive, with almost 65% of businesses predicting growth in 2018.
The findings, which come from a consultation of select businesses carried out by R&D Tax Credit specialists the MPA Group, also identified that almost 80% said their focus for 2018 remained on hiring more staff and developing new products or services.
Furthermore, over three quarters (78%) of the UK manufacturing, engineering, IT and life sciences businesses polled said they expected to see an increase in turnover and improved productivity this year as a result.
However, when questioned on funding their growth, half of those polled said they would invest profits, while 57% believed they didn’t need any additional funding and under a third (28%) stated they planned on applying for R&D tax credits. This is despite 29% of businesses identifying cash flow will be the biggest barrier to achieving their aspirations.
Mike Price, Director at the MPA Group, commented on the survey findings. He said: “While it’s encouraging that business outlook remains positive for the coming 12 months, further supported by the strong focus on innovation outlined in the latest Autumn Budget, it is also important that businesses look at all the ways they can successfully fund their growth. R&D tax credits offer a valuable cash injection which can be reinvested to support new business ventures, investment in equipment, or help to employ a greater number of skilled staff.
“Recent figures from HMRC reported a 20% increase in the uptake of R&D tax credits in 2015/16 compared to the previous year. Yet, for thousands of businesses it remains a largely misunderstood, or even unknown scheme. It is therefore important that those businesses looking at growth in 2018 seek specialist advice; working with a tax credit specialist to identify and maximise qualifying R&D activity, but also one with the proven sector technical expertise and a clear understanding of HMRC requirements in this complex field.”
Last year, the MPA Group delivered more than £31m in tax savings to UK businesses. For more information on the R&D Tax Credit Scheme, visit: www.thempagroup.co.uk/rd-tax-credits/