Innovative companies in Greater Manchester are missing out on significant government cash handouts, according to David Nolan, a specialist in research and development tax credits, of HURST Accountants.

This month, the government significantly increased the amount of research and development (R & D) tax credit payments available to companies. It also made many more companies eligible for the benefits. But widespread ignorance of the scheme means that many companies in the region are not reaping the awards, said Mr Nolan.

“This is, in effect, ‘free money’ from the government which all eligible companies are entitled to. But so many are missing out because they just don’t know about the scheme.”

Unusually amongst independent accountants, HURST has a dedicated team advising clients on R & D credits, set up by Nolan when he joined HURST in 2005 from PwC.

Since then the team have secured more than half a million pounds in credits for clients from the government and that figure continues to grow. On behalf of one client alone HURST obtained a tax credit of £100,000.

The credit scheme is designed to drive innovation amongst UK companies. It gives those companies that carry out R & D work the chance to reduce tax bills.

Said Mr Nolan: “From this month, the definition of the size of company that qualifies for the scheme has been changed to allow many more companies to qualify. It now applies to all companies with up to 500 employees which have annual turnover of up to £80 million and assets up to £86 million.

“Also, there has been an increase in the amount of credit available, from a 150% uplift on R&D spend to 175%. As an example, a company paying tax at 28 per cent which spends £100,000 on R & D would now get a tax reduction of £21,000. If the company was loss making, then it would receive a cheque for £24,000 cash from the taxman.

“R & D credits are available for any company which can demonstrate it is researching and introducing innovative products, procedures and systems which enable them to operate more efficiently and produce higher quality products and/or services. So, for example, investment in a new IT solution to help them do business more effectively could qualify for the credits. There is a perception that these credits are only available to technology or science businesses, in fact many of our clients benefiting are in traditional industries such as printing and manufacturing.”

For more information, contact David Nolan at HURST, 0161 477 2474; david.nolan@hurst.co.uk