Are you missing out on R&D money? » SMEInsider

Are you missing out on R&D money?

If you own a small or medium sized business, you could be missing out on crucial government tax breaks that could save your company thousands.

A recently released report from HMRC reveals that in 2012-13, small businesses claimed nearly £1.4bn in tax relief for R&D purposes. Most SMEs however aren’t aware that they can be claiming tax relief that could help develop their technology.

Nearly 70 per cent of the tax relief claimed in the UK came from London and the South East, which suggests that more can be done to educate small business owners outside of the square mile.

According to the Federation of Small Businesses (FSB), there is an estimated 5 million SMEs operating in the UK. Only 575 SMEs who took on work as sub-contractors in 2012/13 claimed for tax relief on R&D.

To qualify for the tax relief, SMEs must employ fewer than 500 people, and have either an annual turnover of no more than €100 million or a balance sheet total not exceeding €86 million.

‘‘Expenditure on systems development is widespread and companies are missing out. Following further increases, cash repayments of up to 33 per cent of qualifying R&D expenditure can now be claimed and this money feeds through to the current year, helping to boost a business’s profits,’’ said Laurence Bard, tax partner and R&D specialist at Smith & Williamson