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R&D; deadline fast approaching for small firms

Date 5 Dec 2007
Author bdaily.info
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Businesses have been warned they risk missing out on valuable research and development (R&D) tax credits if they do not act soon to apply for them. Tax advisory firm KPMG said that many businesses will miss out when the time limit on claim periods is reduced from six years to two on March 31 2008, because they are not aware of the ‘nature and scale' of activities that qualify.

Companies eligible for the tax credits can deduct up to 150% of qualifying costs on R&D activities when calculating their taxable profits.

David O'Keeffe, head of KPMG's R&D tax credits team, said: "When many people think of R&D they often think of pharmaceutical companies and the classic ‘men in white coats'. In fact the definition is much broader than many people realise. The range of companies that can claim the relief is wide and includes supermarkets, food manufacturers, insurance companies, banks, airlines and engineering services companies."

Last year, businesses were given £150m by the seven special HM Revenue & Customs (HMRC) research and development units, which opened in 2006.

HMRC's head of R&D tax credits, Jeremy Sherwood, said: "We always look forward to hearing from any company in science and technology with innovative ideas who have not yet thought of funding through R&D tax credits."

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