Businesses are missing out on tax relief
News from the Centre of Excellence
According to the Greater Birmingham Chamber of Commerce, half of businesses in Birmingham are missing out on millions of pounds of research and development (R&D) tax relief. A study found that 71 per cent of firms in the region have developed new products or business processes in the last two years, but just over a third, 36 per cent, of firms have claimed tax relief available. Businesses reported that they didn’t claim the reliefs because they don’t think they qualify or believe that it is expensive and time consuming.
Across the UK, the number of firms that have ever claimed is 37 per cent, which puts Birmingham just behind the national average. Shockingly, 29 per cent of businesses in Birmingham are unaware they can claim R&D tax relief if they develop a new product or service.
Mark Tighe chief executive of Catax, who undertook the study, said: “Birmingham’s business sector is missing out on millions of pounds in R&D tax relief each year – money that could be reinvested into businesses to encourage further innovation and growth.
“Many companies still think that R&D is all about science laboratories and test tubes and simply do not relate it to their own work. This needs to change.
“Companies in Birmingham invest hundreds of thousands each year on developing new products and services which would make them eligible for tax relief and yet just a third are actually claiming.
“Business executives looking to improve margins and efficiencies must take a proper look at their R&D tax relief entitlements. Most good R&D tax relief specialists will work on a commission basis so concerns over costs should be dismissed.
“New products and services do not even have to have been successful to qualify for R&D tax relief because it is all about encouraging innovation.
“If all the companies in Birmingham started claiming what they are entitled to it could really supercharge the city’s economy.”