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28 August 2013 | Marino Donati
Smaller transport and logistics companies are failing to take advantage of tax breaks, according to accountants Baker Tilly.
The firm found that the value of tax breaks claimed by companies investing in research and development (R&D) has tripled in the past ten years to £1.2 billion, according to figures from HM Revenue & Customs.
However, only 135 claims for R&D tax relief, totaling £5 million, were made by SMEs in the transport, storage and communications sector. This represents a very small proportion of the £420 million claimed by SMEs in all sectors, Baker Tilly pointed out.
The tax relief is aimed at encouraging greater R&D spending. Since they were first introduced for SMEs in 2000, the tax breaks have become more generous to increase the stimulus for innovation.
Baker Tilly said although the perception is that R&D tax relief is for the manufacturing, science and tech sectors, any eligible company can deduct up to 225 per cent of qualifying expenditure when calculating their profit for tax purposes.
This includes investment in process improvement, software and overheads associated with R&D operations.
The company’s head of transport and logistics, Tony Summers, 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 also be backdated for up to two years.