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UK SMEs fail to claim billions in backdated R&D tax relief

It is estimated that The Treasury owes British small businesses as much as £84bn in backdated research and development tax relief.

Of the 3.5 million small firms trading in the UK, it is estimated that around 57% are eligible to claim tax credits on R&D. Yet, only 1% of small businesses are actually doing so. This means that nearly two million firms are missing out on significant funds.

It was the tax relief specialists Catax that revealed this eye-opening statistic in a recent press release. Mark Tighe, Chief Executive of Catax, said:

“The sum owed to SMEs is astounding when you think about what they could do with that money in the face of significant headwinds.”

It is thought that the main reason this huge pool of money is not being tapped into is the fact that the majority of firms are simply not aware of the scheme.

Even those that know about it do not understand that this tax relief is available for all kinds of research and development. Potentially, anything from creating a new dish for a restaurant to developing a breakthrough medical device can qualify.

The other thing many entrepreneurs do not understand is that these tax credits have the potential to be used to reduce how much they pay in corporation tax.

There is no doubt that this news story is going to create a rush of enquires for accountants in Preston and beyond. This includes dentists’ accountants in Liverpool and other areas, whose clients may be working on developing new ways to treat patients.

Posted by Peter
March 6, 2018
Research & Statistics

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