Studies conducted revealed that in the UK, only 49% of business owners have heard about the research and development (R&D) tax relief. Even among those that are aware of the incentive, a large percentage believe their business would not qualify, however in many cases this is not correct.
57% of respondents say they have developed a new product or service, and/or implemented a new business process over the past two years, which are basic requirements for an R&D claim that most SMEs would be eligible for, however not aware of.
A significant amount of people are also under the impression that an R&D incentive is restricted to only specialised technical, drug and science companies, when in reality R&D can be claimed by companies of all sizes from all sectors.
Another misconception about R&D, made by many UK SMEs, is that an eligible business activity has to be successful and integrated into a business for a claim to be made, when in fact the outcome of the R&D is irrelevant, what matters is the time and money spent.
The lack of awareness around R&D and the eligibility criteria that applies is unnecessarily costing SME’s hundreds of millions in tax relief each year.
The UK Government is trying its best to raise awareness of R&D, however the results of the survey conducted show that the majority of UK SMEs are still unaware of the valuable and widely available incentive. As a result SMEs are losing out not just financially but also strategically, as R&D can put a company one step ahead of the competition, both at home and overseas.
In order to get the facts straight about the R&D tax relief, contact a Swanson Reed R&D tax expert today. We look forward to explaining to process to you and determining whether your business is eligible to make a claim.