More SMEs claiming R&D tax rebates
MORE SMEs in the West Midlands are claiming tax rebates on their research and development work, latest figures have shown.
Figures from HMRC in its annual ‘Research and Development Tax Credit Statistics’ show a 30% increase during 2013 in claims by SMEs compared with the previous year.
In total, there were 13,000 claims during the year 2013/14, which saw the revenue service pay out over £600m in tax reclaims against corporation tax.
From the 12 regions, London and SE England was the highest claimer with 4,600, amounting to £265m. The West Midlands was in fourth place 1,090 claims and £35m claimed back.
The significant increase is thought to be attributable to improvements made to the rebate scheme which increased the rate of enhancement from 100% to 125%, effectively allowing relief of 225% against R&D activities.
Mark Evans, managing director of Wolverhampton based R&D Tax Claims Ltd, said the figures, although encouraging from a West Midlands position, were just scratching the surface.
“The fourth position of the West Midlands in terms of claims made is encouraging but I believe related to the number of manufacturing businesses in the region it could be higher. From our experience we are well aware of many SMEs still being cautious about taking the initiative anywhere beyond an end of year discussion with the accountant,” he said.
He said many firms may be put off from claiming because of the time and processes involved in submitting an application. However, he urged eligible companies not to be put off so easily.
“Perceptions exist which cause hesitation to proceed including the time required to complete the process and, potentially the biggest myth of all, the risk that HMRC enquiries create unnecessary difficulties,” he said.
“In reclaiming over £16m for UK companies since the initiative was introduced and with 100% success rate I can verify that providing the process is understood then it’s very straight-forward. The figures in this report show that HMRC clearly wants and encourages SMEs to take the initiative.”
R&D Tax Claims said it had benefited from employing staff with manufacturing and engineering backgrounds as they understood the needs of businesses operating in the sector.
