Unlocking R&D tax relief

Serial inventor and entrepreneur Sir James Dyson has recently joined the long list of high-profile advocates of a knowledge-based UK economy driven by investment in innovation by the private sector.

Although it is important to focus on this strategy, in reality, there may only be a small number of ways in which this innovation drive will affect your business. Unlike one of Dyson’s creations, the UK tax system if far from an efficient, sleek design.

Alongside government support packages in the form of grants, research and development (R&D) tax relief is a primary tool that should be utilised to incentivise UK companies to invest more in innovation. This generous tax relief provides companies with qualifying R&D activities with a super tax deduction on costs incurred.

Although the public awareness of this relief has increased, H M Revenue and Customs’ (HMRC’s) own statistics reveal that many eligible companies are not taking full advantage of available reliefs.