Innovative enterprises in Scotland secured £95 million in research and development (R&D) tax credits last year, according to new figures just released by HMRC, which administers the government incentive schemes.
The statistics for 2014-15 disclose that businesses in Scotland increased the amount successfully claimed by 73%, up from £55million the previous year. Scottish companies accounted for 5.4% of total UK claims and 4.3% of the total of £2.45 billion UK R&D tax benefits claimed.
Over the same period, Jumpstart, one of the UK's leading R&D tax credit experts, increased the amount it has successfully claimed for Scottish businesses since its inception by more than 30% to nearly £42 million, up from £32 million the previous year.
However, despite the substantial increase in the total amount recouped, companies in Scotland are not reaping the full benefits which might be expected to accrue to them on a head of population basis. There is great scope in Scotland for a much more focused uptake of the scheme.
The HMRC figures show Scottish SMEs reported the second lowest increase in uptake of the scheme in the past five years - a 250% increase in total R&D tax credits claimed since 2010, compared with more than 500% in Northern Ireland and 438% in the North East of England.
Brian Williamson, managing director of Jumpstart, said: "Innovation is key to Scotland's success in an intensely competitive global business environment and R&D tax reliefs are a vital element of the enterprise armoury.
"Many companies in Scotland have made significant gains following successful applications to HMRC by Jumpstart, but many more could achieve returns which can often be game-changing for smaller innovative concerns."
Ian Donaldson, client engagement manager for Jumpstart in Scotland, said: "There is huge scope for a much more focused uptake by companies in Scotland. I would urge firms to get in touch with Jumpstart to find out how they can make significant tax savings through R&D tax credits if they are making a profit or get a cash credit if they are loss making."
Jumpstart currently has 173 active clients in Scotland alone and more than 500 in the wider UK. Since the company was established in 2008, it has made 1318 successful applications to HMRC for companies in Scotland, recouping £41.6 million.
Of the claims made by Jumpstart over the past seven years, the Scottish manufacturing and software and IT sectors have led the way, making 789 applications and gaining credits in excess of £23 million. The next most successful sectors were food and drink, machining, electronics and engineering.
In terms of Jumpstart's regional breakdown, the main Scottish centres of population and business activity - Glasgow and Dunbartonshire and Edinburgh and the Lothians - took the lion's share of the incentives over the same period with 716 claims totalling in excess of £21 million.
Jumpstart was founded in Edinburgh - where it is still headquartered - to address a huge opportunity in the market to engage with UK businesses by informing and guiding them through HMRC’s extremely complex R&D tax relief claim process.
As well as sector-expert business analysts, the Jumpstart team includes scientists and technologists who understand each market area and can produce robust applications which in turn have resulted in significant R&D claims for its clients.