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.
If you would like to know more about how we can help you and your business, please contact Steve Govey or your usual Beavis Morgan Partner.