UK SMEs R&D tax reliefs claims rise by a quarter
According to the latest government statistics, the number of UK SMEs that claim tax relief for research and development (R&D) has risen by almost a quarter.
The amount claimed has gone up from £1.4bn last year to £1.75bn as approximately 20,000 small businesses claim the relief, an increase from 16,000 previously.
R&D tax credits
R&D tax credits were introduced in 2000 and aimed at encouraging spending on R&D by giving tax relief to companies with the potential for innovation.
In the 15 years since, almost 120,000 claims have been made and in excess of £11.4bn has been claimed.
The system has been particularly popular with small businesses in the UK, and the number of claims made by SMEs rose 23% on last year. Claims from large companies saw a jump of 4%.
The popularity of this particular system of tax relief is linked to the generous levels they are set at, with the most recent changes meaning that R&D tax credits allow a reduction in the corporation tax paid by SMEs of £130 for each £100 of qualifying costs. This essentially means a level of 230%.
Baker Tilly tax partner Colin Smyth commented: "These figures are great news for business, and show that real confidence is beginning to return to the UK economy."
"Using the tax system to incentivise and innovate business has been a smart move by the government, and one that is clearly continuing to give a much-welcome boost to the UK economy," Smyth added.
All regions of the UK reported an increase in the numbers of claims made. London, South East and the East made the highest number of claims in the year, representing 46% of the total.