Contractors and small businesses, such as Limited company owners, could be losing out on certain tax incentives because of their lack of awareness, suggests a new report.
A survey carried out by Baker Tilly revealed that of the 750 small businesses surveyed across the UK, just 15% knew about R&D tax credits. This is despite the fact that the government launched this scheme nearly 14 years ago.
With regards to other tax incentive schemes offered, only 8% of those surveyed knew about the Seed Enterprise Investment Scheme (SEIC) and 4% knew about the Patent Box.
The tax incentive, Capital Allowances, was the only one recognised by more than half of respondents (55%).
The Baker Tilly report did find however, that as soon as businesses were aware of an incentive, they would more than likely use it.
George Bull, Tax Partner at Baker Tilly, said, “The survey backs up what we already suspected, that many UK SMEs are missing out on generous R&D tax incentives. There’s clearly an issue of awareness that the Government needs to address, but SMEs also need to take responsibility for finding out about R&D and other tax breaks on offer, in order to take advantage of all opportunities to grow.
“Anecdotal evidence suggests there is a perception that R&D refers to lab-based work only, whereas a whole range of innovative measures in SMEs can be classified as R&D.”
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