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Treasury owes British SMEs £8.4bn in research and development tax relief, says Catax
Specialist tax relief firm Catax said on Thursday that Westminster owed small businesses across the UK as much as £84bn in unclaimed research and development tax relief.
Of the almost 3.5m SMEs actively trading in the UK, 57% of them had been eligible for tax credits on research and development, but Catax said the due to the break being "so poorly advertised" only 1% of those covered under the policy had ever claimed the relief.
The average claim for relief came to around £43,000 and could be backdated up to three years, as HMRC rules stated that a business could make a claim up to two years after the end of the financial year in which the expenditure occurred.
Catax estimated that Chancellor Philip Hammond was in possession of an "SME war chest" worth £84.2bn, roughly double the annual budget of the Ministry of Defence and more than enough to run the NHS for eight whole months.
Mark Tighe, chief executive officer of Catax, said, "The sum owed to SMEs is astounding when you think what they could do with that money in the face of significant economic headwinds."
"The Treasury needs to do more to explain to firms what counts as R&D. Most don't realise it's not just a new jet engine, but a new beer, a piece of software, an engineering process or even a new innovative dish at a restaurant," Tighe added.