Firms ‘are missing out on tax relief for research’

The chairman of Clough and Company, based in Cleckheaton, West Yorkshire, said a number of companies were unaware of what they were entitled to recoup.

Research based on claims for tax relief to HM Revenue and Customs has revealed that spending on research and development (R&D) rose by eight per cent in 2012 to a record high of £11.9bn, with businesses claiming back £1.2bn in tax relief on their investments.

Figures from Clough & Company show that there has been a similar increase in the amount of R&D tax relief claims processed in the region for its clients during 2012 and is attributing the rise to new incentives introduced by Chancellor George Osborne.

Clough & Company’s practice chairman Steven Gash said: “R&D tax relief is intended to drive productivity by encouraging innovation. Extending the tax credit for R&D spending by large businesses has encouraged businesses to increase their investment in innovation on a more long-term basis.

“Companies can receive up to 225 per cent tax relief on qualifying R&D costs which don’t just cover scientific development, as R&D applies to staff costs and consumables too.”

Clough & Company recently completed R&D relief claims for manufacturing firms NSF Controls in Keighley and Millers Oils in Brighouse.

Mr Gash said: “NSF Controls is a leading UK manufacturer of solenoids, switches and sub assemblies.”

He added: “The company’s development team spends a huge amount of time designing and testing new products to overcome technical flaws and create some of the most innovative products
on the market. We were able to help NSF Controls achieve a £40,000 tax saving on projects already completed and have identified further tax savings for the future.”

Tax relief is available for most activities that bring about improvement or changes to products or processes.

Mr Gash said: “It’s also worth checking if the products or processes a business has developed can be patented or carry existing patents as the new ‘patent box’ relief could further reduce tax payable on profits generated from any product or process in which the patented product or process is used.”