Manufacturers are being urged to explore whether upgrades they have implemented can earn them a slice of a £300m pie made available through research and development tax credits.
James Stephens, a senior manager in Ernst & Young’s corporate tax team, said companies may not know that ventures they have already carried out could qualify them for the scheme.
Under the regulations businesses can deduct up to 175% of their R&D spend from their tax bill.
“Experience has shown that ‘R&D’ for tax purposes extends beyond traditional activities taking place in R&D laboratories and development centres. Companies do not just have to be undertaking ‘blue sky’ research and ‘new product’ development to make R&D tax claims. Wider business areas also often contain R&D activities including manufacturing operations and assembly processes,” said Stephens.
He pointed out that under legislative changes made last August companies with up to 500 employees and a balance sheet of up to €86m now qualify for the scheme. Previously it was only for companies with up to 250 staff.
Last month the Confederation of British Industry (CBI) urged government to retain the R&D tax credit after a survey found manufacturers were upping levels of research and hosting more of it in the Britain as a result.
Richard Lambert, the CBI’s Director-General, said: “As our economy seeks to re-balance over the months ahead, the government must recognise the value of the R&D tax credit and commit to retaining it and encouraging more firms to invest in research and development.
“It should also go further by building on its success; extending the rate and range of credit, enabling more companies to apply and covering more of their associated overheads.”