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Earlier this year, the government increased Research & Development Tax Relief by 225%, and from April 2013 will introduce an above the line tax credit for larger companies involved in research and development. To complement this regime, the government has also introduced The Patent Box which will allow corporations to pay a lower rate of tax on profits generated from UK-owned intellectual property. Both initiatives are designed to encourage innovation and investment in new technologies among UK SMEs. However, the RSM Tenon Business Barometer, a quarterly survey of senior management in small and medium-sized enterprises, has found that the take-up of the Patent Box regime has been disappointingly low so far. Only 2% of SMEs said that they would be applying for the regime, with nearly a quarter saying that they hadn’t looked into whether their company qualified. A further 2% said that although they fell into the criteria for qualification, they felt that the regime was too complicated to apply. This could mean that many SMEs are missing out on thousands of pounds worth of government money that could be reinvested in their company. Paul Belsman, RSM Tenon’s head of tax, said: “The introduction of above the line R&D and the expansion of the Patent Box are really positive initiatives by the government, and demonstrate their commitment to attract investment in UK SMEs. “But clearly there is still a great deal of work to be done to raise awareness of these lucrative tax breaks among SMEs, and I wonder whether the low take-up indicates that the government hasn’t thought this one through properly, or that business owners think these incentives are just too complicated for them to consider.” Other Business Money News
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