A new plan to boost investment in research and development (R&D) for smaller businesses has been launched by the government.
The Treasury wants the two-year plan to increase in the amount of smaller businesses that are utilising R&D tax relief. The tax relief will help reduce corporation tax on profits by offsetting them against any investments in R&D.
Latest figures show that more than 15,000 SMEs have claimed tax relief for 2013/14, a 19% increase from the previous year. Businesses received a total of £1.75 billion in R&D tax relief in 2013/14.
The outline of the plan is as follows:
- companies with a turnover of under £2 million will be able to seek assurance on R&D tax relief
- interactive guidance methods will be developed
- HMRC will attempt to use the data at its disposal to actively identify companies carrying out R&D but not currently claiming tax relief.
The government estimates that every £1 of R&D tax relief helps stimulate further R&D investment in the economy of between £1.53 and £2.35.
Financial Secretary to the Treasury David Gauke, said:
“R&D is crucial for the long-term growth of the UK economy. Over 15,000 SMEs claimed the relief in 2013, an increase of around 19 per cent from the previous year, but we need to go further to support pioneering small businesses.
“That’s why we’ve published a document setting out our plans to increase awareness and make it easier for people to apply.”