Article: Research & Development tax allowances for SMEs?

Research and Development, R&D, it gets written about a fair amount so we know it’s important, so what? Over 50,000 SMEs in the UK have claimed research and development tax relief in the past year, but this is significantly under the total £6billion budget currently set aside by the government (who have committed an increase to this to be 2.4% of UK GDP by 2027). Opportunities for SMEs in claiming R&D are not just available, but it is something the government is actively setting aside funds for.

So, we know the relief is available and there are funds to pay it – but who is eligible? For a business to quality for SME R&D tax relief, they must have less than 500 employees and a turnover of less than £86million. They can claim relief equivalent to 130% of qualifying expenditure. If the business incurs a trading loss in the period in which R&D tax relief has been claimed, it can surrender all or part of that loss for a tax credit of 14.5% – vital cash for a business.

Why should businesses take advantage of this tax relief?

Many businesses remain unaware of this option, which can be a great opportunity to fuel (and more importantly fund) innovation. The government wants to use businesses’ tax allowances to invest in technology and science projects, and even if the project is unsuccessful, the claim will likely still be valid. It is part of the governments push to help the UK remain a competitive location for new technologies and research.

We know that innovation is important in any economy and can be highly beneficial for business too – it’s a good way to keep current and keep making a profit.

As Henry Ejdelbaum, MD, comments “R&D grants are often underutilised by SMEs who are eligible to claim the benefit. We always want our clients to benefit from any savings available to them, especially where the funds can be used to fund innovation. My advice would be, don’t assume you aren’t eligible and speak to your accountant who should be able to give you some more guidance.”


For further information please contact:

Johan Da Silva

AIMS Accountants for Business

020 7616 6634

Notes to editors:

About AIMS Accountants for Business

Established in 1992 to provide SMEs a fixed fee service, free of any obligations, through franchised accountancy practices. For close to 30 years our success has been driven by our singular client focus, our proven management systems and the ongoing support and training provided to all AIMS franchisees.

By doing more than just crunching numbers, by providing business advice and creating a solid relationship with our clients, we provide the services that has seen us become the only nationwide network of qualified accountants in the UK.

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