The vast majority of the UK’s small and medium-sized enterprises (SMEs) are currently unaware of a tax break that is arguably the centrepiece of the coalition’s plans to encourage businesses to boost investment in growth, according to a new survey by Baker Tilly.
Just 15 per cent of small firms surveyed by the accountancy firm were aware of the government’s Research and Development (R&D) tax credits. The scheme, which was introduced in 2000-01, has been expanded ever since yet overall awareness does not appear to have grown with it.
The surprising lack of awareness among UK SMEs suggests that large numbers of small businesses are missing out on significant savings.
From April 2012, SMEs have indeed been eligible for 225 per cent relief from Corporation Tax on allowable R&D charges.
Robert Ross, managing partner for Scotland at Baker Tilly, said: "Our survey supports what we already suspected that many SMEs are missing out on generous Research and Development and other tax incentives.
"The Government should do more to raise awareness of these tax breaks."
Baker Tilly’s official figures found that large companies benefited from almost two-thirds (65 per cent) of the £1.2 billion R&D tax relief claimed in 2011-12.
Meanwhile SMEs in Scotland filed 585 claims for R&D tax relief worth just £24 million in the year.
Just eight per cent of the 750 SME respondents were aware of the Seed Enterprise Investment Scheme (SEIS) to assist early stages companies in raising equity funding.
Similarly, only four per cent knew of the Patent Box measure, under which firms pay tax at lower rates on profits earned from the intellectual property they develop.
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