SMEs are missing out on potentially thousands of pounds in research and development (R&D) tax credits due to daunting jargon and a lack of awareness.
Introduced in 2000, R&D tax credits enable businesses, including start-ups, to reclaim up to 33p for every £1 spent on “advances in science and technology”. They can receive a cash benefit, even if their business is loss-making.
In the 2014-15 tax year, £2.5 billion of R&D tax relief was claimed, with SMEs accounting for £1 billion – up from £325 million the previous year. These claims were made by various businesses, ranging from breweries and pharmacies to construction companies and even restaurants, each of which had developed a new product or service, or implemented a new business process.
However, according to The Sunday Times, a recent survey reveals only 5 per cent of small businesses have used R&D tax credits, compared with 50 per cent of large companies.
R&D tax credits have proved to be a major boost to British business, but many are still unaware that they can claim the credits to help fund research and development, often incorrectly thinking that their on-going enhancement of existing products and services does not quality, because “it is just what we do”.
Having helped many businesses across a variety of sectors make significant “money back for research and development” claims when some were previously unaware they could, we know first hand how important the R&D tax credit scheme is in encouraging innovation and increased spending on research and development activities by companies operating in the UK.
Our Research & Development (R&D) tax credits specialists are on hand to maximise the value of any potential claim and manage the often complex process on your behalf.