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HM Revenue & Customs (HMRC) has recently published a consultation document with the aim to encourage more companies to claim the very generous Research & Development Tax Relief. Entitled ‘Improving access to Research & Development for small business’ the consultation is seeking views on how best HMRC can reach out to such businesses to make the claim. Currently 15,000 companies claim £1.4 billion in credits per year.
Armstrong Watson will be responding to the consultation and call for any local businesses who have previous experience in claiming the relief, or those who have not previously been aware of it to get in touch.
Nigel Holmes, Tax Partner at Armstrong Watson and head of their Science and Technology team says ‘we have many clients making claims, of all sizes, in many industries, including engineering, manufacturing, IT, pharmaceutical and energy. However, many companies out there are either unaware of the relief or believe the relief is only available to pure research, or for ‘men in white coats’.’
Nigel goes on to say ‘Whilst HMRC’s consultation is to be applauded, and it isn’t often HMRC are seen to be proactively pushing forward a tax relief, they may struggle with connecting to businesses. Such businesses are more than likely to turn to their accountant rather than HMRC. We have been pushing the relief to the forefront of people’s minds since its inception in 2000 but I am sure there are many more companies out there not claiming.’
At the same time, a recent report indicates 23% of UK medium businesses are expected to increase their R&D investment this year. Given that the tax relief rates are to be uplifted from 1 April 2015, and given that there is funding out there for R&D too, now is a great time to start that innovative project you have been considering for a while, and maximising the funding, tax reliefs and advice available.
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