Transport and logistics firms missing out on tax breaks warns Baker Tilly
According to data from HMRC, only 135 claims for R&D tax relief were made by SMEs in the transport, storage and communications sector, with claims totalling around £5m – just a tiny fraction of the £420m claimed by SMEs in all sectors.
The figures also show the value of tax breaks claimed by companies investing in research and development has tripled in the last 10 years to £1.2bn.
R&D tax credits are a tax relief designed to encourage greater R&D spending and innovation. The credits were first introduced for SMEs in 2000. Since then, the available tax breaks have become more generous and HMRC has expanded the way it interprets and applies the rules in order to provide greater stimulus for innovation in the economy.
While the perception might be that R&D tax relief is for the manufacturing or science and tech sectors, any eligible company can deduct up to 225% of qualifying expenditure when calculating their profit for tax purposes.
The kinds of activities undertaken by logistics firms which might qualify for this relief include:
- Investment in process improvement.
- Investment in software.
- Overheads associated with R&D operations.
Tony Summers, Baker Tilly’s Head of Transport and Logistics said: ‘There are likely to be many firms in the logistics sector who are unaware that they may qualify for this type of tax relief. Claims can even be backdated for up to two years, so for companies struggling with cashflow difficulties, this relief can provide a much needed lifeline.’
