New figures show small firms in the north west are failing to claim enough tax relief to support their innovation, says a Manchester adviser.
George Lovell, a tax partner at DTE, says the region’s innovators may not be claiming enough research and development tax relief, and in some cases do not even realise they are eligible to do so.
The tax credits are designed to encourage greater innovation by reducing a company’s tax bill by an amount equal to a percentage of the company’s allowable R&D expenditure.
An SME which has no tax bill to reduce may claim a cash payment instead.
Mr Lovell highlighted figures released by HMRC last week which show the number of claims made, been broken down by region and industry sector for the first time.
Mt Lovell said: “SMEs in the north west made 785 claims for R&D tax relief in 2010-2011 with a value of £25m.
“This equates to 10.8 per cent of the total number of claims made by SMEs in England, but represents only eight per cent of the total value of those claims.
“If we compare ourselves to the south west, where SMEs made 665 claims worth £29m equating to 9.2 per cent of the total number of claims in England, but which represents 9.3 per cent of the total value of all SME claims – it’s a much healthier ratio than the north west.
Source: MEN Newsdesk: September 12, 2012