Surprise tax relief good news for innovation

A surprise tax measure in the pre-budget report means now could be a good time for Midlands SMEs to start reinvesting in research and development (R&D).

The relaxation in the qualification rules now allows SMEs to claim relief for R&D activity, regardless of whether they hold the relevant intellectual property rights. This move is expected to increase take up of the popular relief in the coming year.

Historically R&D tax relief is an area that has assisted many Midlands businesses to minimise their tax liability.

Furthermore, under additional new rules coming into force in 2013, a lower rate of corporation tax rate will apply to income derived from patented inventions that resulted from R&D.

This is encouraging news for forward-thinking SMEs in the region who may be considering reinvesting in or stepping up R&D.

Understandably expenditure on R&D hasn’t been top priority for Midlands businesses as they cope with the downturn. However if encouraging news on the health of the economy continues to emerge, their thoughts will increasingly be turning to growth strategies for the longer term.

Taking advantage of this attractive and more flexible R&D tax regime is one way Midlands SMEs can stay ahead of the competition. Given the proud heritage of innovation across the Midlands, we could see some new household names emerging from the current downturn as was the case in the recession of the 1990s.

Contact details
Email: Richard Farnsworth
Tel: +44 (0)1509 60 4267