Small and medium-sized business (SMEs) are looking to expand next year, but many are not aware of the various tax breaks and tax incentive schemes targeted at the sector, according to research say Harris & Co accountants Northampton.
The survey of 750 SMEs for Your Business Outlook 2014 report found that 45% are either extremely confident or confident about growth opportunities over the next 12 months, and 48% said they expected to increase turnover by 5% or more over the same period.
However, only 15% knew about R&D tax credits, despite the government launching the scheme nearly 14 years ago and recent moves to make the tax breaks more generous in order to encourage innovation. Other tax incentive schemes had a similarly low profile, with only 8% of respondents knowing about the Seed Enterprise Investment Scheme (SEIS) and just 4% aware of the Patent Box.
HMRC’s own data shows that most of the R&D tax relief claimed in 2011-12 was by large companies (£780m) rather than SMEs (£420m).
According to the survey, only one tax incentive – Capital Allowances – was recognised by more than half of respondents (55%). The survey did find however, that once businesses knew about an incentive, they tended to use it, suggesting that knowledge was the main issue, rather than perceived scheme effectiveness