Companies unaware of R&D tax relief

Posted on 31 Aug 2017 and read 414 times
Companies unaware of R&D tax reliefEngineering innovation and creativity are stifled by poor awareness of research and development (R&D) tax relief among SMEs, according to a Censuswide survey for tax relief specialists Catax.

More than three quarters of small and medium-size engineering firms have not heard of R&D tax relief.

The poll, which surveyed 500 senior managers and owners, also found that 36% think tax relief is only available for high-tech science or drug companies (www.cataxsolutions.com).

The Government credits are available for any business that has developed a new product or process in the last three years, while seeking to achieve “an advance in overall knowledge or capability in a field of science or technology, through resolution of scientific or technological uncertainty”.

Catax CEO Mark Tighe said that low awareness of R&D relief in engineering is restricting the “sheer depth” of British innovation. “I think the real issue is the lack of understanding over what can qualify for this relief.

There’s a belief that only firms employing ‘people in white coats’ are eligible for R&D relief, but this simply isn’t true. If an engineering company develops a new process, technique or product, then even if the development process ends in failure, it could qualify.”

More than half of the survey respondents fitted that basic requirement, Catax said, although HMRC highlights the additional requirement of “advancing knowledge or capability”.

Successful claims from Catax’s engineering clients in 2017 include rapid-deployment hydraulic bollards for use during terror attacks and a steel support framework for railway tunnels.

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