Many Midland manufacturers are missing out on valuable tax relief on research and development, say regional business experts.
David Hillan, corporate tax partner at Grant Thornton, said bosses were failing to realise they could be in line for savings on innovative research.
Mr Hillan said: “It is still surprising how many businesses fail to recognise that an element of their activities could qualify for this valuable relief.
“The introduction of the long-anticipated patent box regime and with the widening of the R&D tax relief scheme for large businesses from this April means there’s never been a better time for the innovative companies for which this region is renowned to take advantage of the taxman’s generosity.”
He said large businesses could previously claim enhanced relief of 30 per cent on their qualifying costs, compared to 125 per cent for small and medium-sized businesses.
In addition, small and medium businesses could surrender the enhancement for a repayable tax credit even where the business was not actually paying corporation tax – for example due to trading losses.
Mr Hillan added: “The recent introduction of the “above the line” tax credit for large companies changes this and it is now possible for such companies to receive a cash repayment similar to the scheme already in place for small businesses.”
Colleague John Foskett, an associate director in Grant Thornton’s corporate tax team, added: “The new legislation has wide ranging applications for OEMs and Tier 1 and 2 suppliers alike in the manufacturing sector, providing a real opportunity to achieve a cash benefit for the R&D spend undertaken.
"It also makes R&D claims more attractive to large overseas groups, in particular US groups, investing in the UK.”