Transport Firms “Missing Out on Tax Relief” Claims Report
22nd May 2018
Nearly 8 in 10 transport firms could be eligible for Research and Development (R&D) tax relief on new products and services but only a QUARTER have ever claimed, specialist tax relief firm Catax revealed today.
The firm says these companies are throwing away millions of pounds a year because a massive 79% of businesses in the transport sector have developed new products or business processes in the past two years, research shows. This means they are in line for valuable R&D tax relief that the government provides to encourage innovation.
But only 46% of transport firms know of R&D tax relief and just a quarter (25%) report ever claiming it – either because they don’t think they qualify or they incorrectly believe that it could cost them money. The national average for the number of firms that have ever claimed is 36.8%.
Incredibly, transport executives underestimate the value of the average SME R&D tax relief claim by £24,955, according to the Catax/Censuswide survey.
Executives believed the average value to be just £21,045 when the true figure is £46,000 for firms in all sectors nationwide. Those transport firms that have undertaken research and development over the past two years report spending £332,738 on average.
R&D doesn’t even have to have been successful to qualify and claims can be backdated at least two years.
Catax CEO, Mark Tighe, commented: “Only a minority of transport firms are aware that the relief exists and this has to change if British technology and industry is going to fulfil its full potential. That’s why it’s important to recognise that R&D is not all about lab coats and multi-national companies, and the R&D doesn’t even have to have been successful to qualify. Cost benefit doesn’t come into it either because most good R&D tax relief firms will work on a commission basis.”
R&D tax credits can help to reduce a limited company’s corporation tax bill or be claimed as a cash sum reimbursement from the HMRC. R&D tax relief only applies to those businesses that are liable for corporation tax, including businesses making a loss.