Many small business firms in the UK are missing out on R&D tax breaks, which could be worth millions, according to recent research.
While large companies can claim back 7.5 per cent of R&D expenses, smaller firms can claim back 15 per cent. If they are loss making, this rises to 24 per cent.
Accounting firm Deloitte, which interviewed 563 companies, said more than four-fifths of the firms not signing up for R&D credits employed less than fifty technical staff.
This figure could mean that the scheme is not getting far enough down the system to the companies that could benefit most.
David Cobb, head of R&D tax services at Deloitte, said: “It's ironic that the firms that could benefit most are the ones that are missing out… Any company developing new products, materials, processes or services may be eligible to claim tax relief.”
Less than half (45 per cent) of small and medium sized enterprises (SMEs) are taking advantage if the scheme and 24 per cent who are not taking advantage of the scheme do not even know the R&D tax relief exists.
Research also shows that only 10 per cent of the firms questioned in the Midlands had signed up for the tax relief, but 55 per cent of firms from London, Scotland and Northern Island had signed up.
Cobb went on to say: “The R&D tax relief provisions are still fairly new and relatively complex. It appears that some companies are put off by a perception that claiming is difficult or they are simply unaware.”
In a bid to help the businesses that are not taking advantages of the tax benefits Deloitte is sending specialist teams to areas such as Bristol, Cambridge, Leeds, Manchester and Reading.
Deloitte