Small firms in East of England ‘missing out on R&D tax relief’
- Credit: Archant
Businesses around East Anglia could be missing out on support worth thousands of pounds, with new figures showing the region may be falling behind when it comes to making Research and Development (R&D) tax credit claims.
HM Revenue & Customs (HMRC) statistics reveal that companies in the East of England accounted for 10% of 22,445 research and development tax credits claims in the tax year 2014-15, with HMRC paying back £250m to companies in the region, out of £2.45bn of tax relief paid out nationwide.
But tax specialist Jumpstart says that many small and medium-sized enterprises (SMEs) are still unaware they could claim back thousands in Corporation Tax from the Government.
The firm says the figures show that the East is lagging behind other regions in terms of the increase in claims by SMEs over the last five years. Since 2010, the amounts claimed by SMEs in the East have increased by 198%, compared with 438% in the North East at 438% and 364% in London.
Jumpstart’s client engagement manager Lee Williams said: “These latest HMRC figures show that there is still more work to be done in promoting the tax relief scheme for small and medium sized companies.
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“Furthermore, local companies could be under-claiming or over-claiming because their technical project activities and expenditures are not being accurately interpreted against legislation.”
KPMG R&D specialist David Taylor said that around a third of R&D incentives were going unclaimed in the region.
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He said: “The advantage of R&D incentives is that they are designed to benefit all businesses, regardless of industry, and the criteria apply to more activities than many people realise. Quite simply, you don’t have to be wearing a lab coat to qualify.
“However, while the figures show that there are significant and valuable benefits being claimed, there are still many businesses locally that are not benefiting from the reliefs on offer.”
To qualify for R&D tax relief a company must show its project seeks to achieve an advance in knowledge or capability in a field of science or technology. There are separate schemes for SMEs and larger companies.
For details on eligibility and how to apply, visit www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief .