Twenty per cent of entrepreneurs in the East Midlands are missing out on significant reductions to their company tax bill because they are unaware of the current Research & Development Tax relief (R&D).
The figure was released by RSM Tenon in its quarterly Business Barometer which survey senior management in SMEs around the region.
Jacky Kinsey, tax director at RSM Tenon in Nottingham said: “There is a popular misconception that R&D tax relief is only available to scientific companies – and it’s not. The activities that qualify are wide ranging and more SMEs in the East Midlands should be taking advantage of them. At RSM Tenon we take this very seriously.
“Only 15% of entrepreneurs in the East Midlands are claiming the R&D tax relief they are entitled to. This is the highest figure quoted in the survey. In the South only five per cent of SMEs are claiming tax relief, in the north it falls to four per cent, in Scotland it is two per cent and in Northern Ireland it rises to 14%.
“Even though the figures position East Midland SMEs as those that claim the most tax relief, much more needs to be done to boost this in the future.”
Last week the Draft Finance Bill spelt out plans by the government to increase Research & Development Tax Relief (R&D) to 225%. The increase is planned from April 2012, along with some changes to scheme rules designed to boost competitiveness of the UK tax system. This follows an increase in April 2011 whereby for every £1 SMEs spend on research and development, they could claim back £2 in tax relief.
“‘It is disappointing that so many entrepreneurs aren’t aware that relief already exists,” continued Jacky. “Because it could provide a welcome boost to many UK companies in the current economic climate. “More must be done in 2012 to get this message across.”
R&D Tax Relief is potentially available to any business carrying out technological advancements in products or processes, although this can cover a wide range of activities.
