The insurance industry is missing out on claiming back research and development (R&D) tax
New GovGrant (formerly known as GGTC) chief executive Luke Hamm is targetting the insurance industry for gaining back funds in research and development (R&D) claims.
The company works with businesses across many industries to help them maximise funding through tax incentives, and former Aon executive director Hamm says the insurance industry should claim back much more where it can show evdence of innovation.
The government is pushing for the UK to recognised as the “choice for innovation”, but Hamm says that the UK is way behind the curve on a European level.
This month, as part of the industrial white strategy paper, the government launched ‘The Allocations Booklet’ which highlights its aim to achieve 2.4% of gross domestic product (GDP) for the private and public sector in R&D claims by 2027, with a total of £1.7bn being committed to the first two waves of industrial strategy challenge fund (ISCF).
It spells out the benefits of research funding, whilst setting budget allocations to UK research and innovation (UKRI).
Despite it showing the biggest ever increase in public R&D funding for the last 40 years, Hamm said that even if the UK reaches its goal of 2.4% it is still way behind the main players.
UK as the ‘choice for innovation’
He added: “When you consider the issues going on with Lloyd’s and the uncertainty of Brexit, to drive through this agenda with the UK being the ‘choice for innovation’ really needs people to be aware of how the government wants to invest in that.”
In July Lloyd’s of London announced it was reviewing all aspects of business after announcing a £2bn loss and that its chief executive Igna Beale was stepping down.
Hamm claims that 80% of businesses in the UK do not get a tax refund. He said this was due to the insurance industry not having that level of awareness because on the surface it does not look “innovative.”
The drive to change is ‘monumental’
Established around 10 years ago, GovGrant was started by expert entrepreneurs who stumbled across the R&D tax scheme, a government backed initiative which supports the claims agenda.
Hamm previously worked for Aon for over a decade, a background he said has influenced the type of businesses he is targeting next, because in insurance the drive to change is “monumental.” He originally joined GovGrant in 2017, but in April this year he was appointed to chief executive.
Since its inception the firm has retrieved around £165m for its clients, processing more than 5,000 claims.
But he added that part of the problem is that startups do not recognize that their day job is R&D, plus people are often reluctant to admit to failure.
Hamm said: “If you spend two years trying to create something and don’t get there, all of that is R&D, because you couldn’t find the answer. Any failures along the way is all part of the R&D process.”
Last year however, £200m was invested in UK insurtech startups according to a report by Accenture, with the majority of insurtechs focusing on the non-life sector.
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