R&D News & Events

What’s in a percentage?

By Brian Williamson

The world of numbers, statistics and percentages is often misleading.

Take numbers… they’re all relative you know. A headline of ‘10 accidents’, for example, isn’t enough to draw any conclusions from in itself. 10 in what timeframe and where is much better. So 10 accidents in the last five minutes in a playground is shocking, whereas 10 accidents in Europe in the last year from people falling off their bikes, well… isn’t.

Statistics can also be confusing. 99.9% of people who cut their grass in the dark with an electric lawnmower aren’t electrocuted might make you think it’s safer to cut your grass at night. Huh? A little more information please. What about ‘half the world's population earns about 5% of the world's wealth’? From that you can conclude that the other half earns 95% of the wealth, pointing to a huge disparity in earnings potential.

Then there’s good old percentages, the factor we come across most often at Jumpstart. If I said to you that, when building a new house, 22% of the average house cost is down to joinery, can you tell me how much a joiner would charge you to build a house? Of course not. First, you would need to know the cost of the house and second, if it was going to be larger or smaller than the average house. Now, here comes the interesting bit.

If I said to you that I had a joiner who would charge you 20% to build a house, instead of that 22%, would you use him? Again, not enough information. You would need to know the size of the house and, more importantly, the quality of the build. Percentages on their own, you see, are meaningless unless you know what they relate to.

So where am I going with this? Well, at Jumpstart we occasionally come across clients who say they know someone who can do their R&D claim for a smaller percentage than we can. Again, it’s not the percentage but the size of the claim that counts, since history shows that Jumpstart’s claim sizes, with all our experience and expertise, can be up to a staggering 12 times larger than the ‘cheaper’ option. Do the maths! Which would you rather have? 2% more of, say, £10,000 or a slightly smaller percentage of £120,000? Hmmm…

So the next time someone says to you "We can do that for a better percentage", think about what that really means. You can either go with someone who can do you a ‘cheap deal’ or the UK’s leading R&D tax credit specialist, not by numbers, statistics or percentages alone, but overall – that is Jumpstart.

Posted on Monday, 29th October, 2012