R&D tax reliefs providing much needed cash for local companies

Research and Development (“R&D”) tax reliefs were introduced to give generous tax incentives to companies to encourage them to undertake research and development activities. The reliefs operate by giving an enhanced tax deduction to companies on qualifying expenditure on research and development.

Tax relief is currently given on 175% of qualifying expenditure for small and medium sized companies (SMEs) and 130% for large companies. This means that a SME can claim tax relief of £1,750 for every £1,000 of qualifying R&D expenditure. Where the enhanced relief creates or increases a loss, this can be converted into a tax repayment of £245 for every £1,000 of qualifying expenditure.

Scott Burkinshaw, Tax Associate with Barber Harrison & Platt, the largest independent firm of Chartered Accountants in South Yorkshire & Derbyshire, commented, “These reliefs can have a major impact on a company’s cash flow. We have been successfully involved in a significant number of sizeable claims; the largest tax repayment we have achieved is over £700,000.”

Scott added, “It is important that companies carefully consider whether they may be eligible to make a claim to avoid missing out on a valuable tax relief at a time when cash flow is such a major concern. A common misconception is that the reliefs merely apply to companies employing personnel working in laboratories but a wide range of innovative activities such as advanced manufacturing can also qualify.”

ENDS 

Notes to Editors:

Barber Harrison & Platt is one of the leading firms of independent Chartered Accountants in the North of England. It is the only independent firm in Yorkshire to be listed in Accountancy Magazine’s Annual Top 60 where it is currently placed 55. The firm has 15 Partners and 160 staff at offices in Sheffield and Chesterfield.

Barber Harrison & Platt provides the full range of audit, accounts and taxation services. It also has one of the largest corporate finance teams in the area and was named Corporate Finance Advisory Firm of the Year at the Insider South Yorkshire Dealmakers Awards in 2008.

Accountancy is the journal of the Institute of Chartered Accountants in England and Wales and publishes the Top 60 league table annually in its July edition.

For further information please contact:

Scott Burkinshaw (Associate) 0114 266 7171
scott.burkinshaw@bhp.co.uk

Louise Bright (Marketing Manager) 0114 266 7171
louise.bright@bhp.co.uk