Yorkshire manufacturers are being urged to take a fresh look at tax relief schemes, aimed at encouraging research and development.
The call comes from PricewaterhouseCoopers, which says new regulations that come into force in April 2013 open the way up for claims from larger companies and those that have been making a loss because they are investing in research and development involving emerging technologies.
Gordon Singer, head of tax at PwC in Yorkshire, said:
“Larger firms in the region are big spenders when it comes to R&D and they deserve to be able to take the credit for their investment.
“From April next year, it is proposed that even if they are making a loss they will be able to claim a repayable tax credit calculated by placing the sum invested in R&D above the line. For tax purposes, this means their R&D spend can increase the company’s profits before tax.
“For those investing large sums in R&D each year, the tax credit repaid to the business could be significant and this is likely to encourage some engineering teams to consider claiming R&D tax relief for the first time.”
Mr Singer says benefits for small and medium sized companies are no longer limited according to the level of Pay As You Earn and National Insurance Contributions they pay.
“This is good news for smaller, knowledge-based businesses that typically have a lower headcount but still invest significant sums in R&D. These businesses are creating jobs for the future and can now literally take full credit for their investment.”