BREAK: Are you missing out?
Hundreds of smaller transport and logistics companies may be missing out on tax breaks, Baker Tilly have warned.
Latest HMRC figures show the value of the tax breaks claimed by companies investing in research and development has tripled in the last 10 years to £1.2billion.
However, according to the data, only 135 claims for R&D tax relief were made by SMEs in the transport, storage and communications sector.
Indeed, claims from the sector totalled just £5million –a tiny fraction of the £420million claimed by SMEs in all sectors.
R&D tax credits, first introduced in 2000, are a tax relief designed to encourage greater R&D spending and innovation.
Since their launch, the available tax breaks have become more generous and HMRC have expanded the way they interpret and apply the rules to stimulate innovation in the economy.
The perception is widely that R&D tax relief is for the manufacturing or science and tech sectors.
However, any eligible company can deduct up to 225% of qualifying expenditure when calculating their profit for tax purposes.
The kinds of activities undertaken by logistics firms which might qualify for this relief include investment in process improvement, investment in software and R&D overheads.
Tony Summers, Head of Transport and Logistics at Baker Tilly, said: “There are likely to be many firms in the logistics sector who are unaware that they may qualify for this type of tax relief.
“Claims can even be backdated for up to two years, so for companies struggling with cash flow difficulties, this relief can provide a much needed lifeline.”
Image courtesy of comedy_nose, with thanks.