Last week the Draft Finance Bill spelt out plans by Government to increase Research & Development Tax Relief (R&D) to 225%, but research by RSM Tenon has found that nearly one in eight UK entrepreneurs are unaware of the existence of this Relief.
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.
The increase by Government is planned from April 2012, along with some changes to scheme rules designed to increase 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. However, the RSM Tenon Business Barometer, a quarterly survey of senior management in small and medium sized enterprises, has found that almost twenty per cent of UK entrepreneurs were unaware of this, and so could potentially be missing out on making significant reductions to their company tax bill.
Only seven per cent of the entrepreneurs surveyed by RSM Tenon said that they were currently claiming the relief, with the highest number (15%) in the Midlands.
Paul Belsman, Head of Tax for RSM Tenon said: ‘There is a popular misconception that R&D tax relief is only available to scientific companies - it's not. The activities that qualify are wide ranging, and the increase announced last week by the Government now means that this is a very attractive tax relief for UK SMEs.
‘It is disappointing that some many entrepreneurs aren’t aware that this relief exists, as it could provide a welcome boost to many UK companies in the current economic climate.’
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