Amidst the challenges posed by the recession, some small and medium sized enterprises (SMEs) have been given a scrap of good news as they can now benefit from significant changes to Research and Development (R&D) tax credits which came into effect on 1 August 2008.

Jean-Paul Quertier, a partner and chartered tax adviser with accountants Simpkins Edwards, explained:

“As announced in the Budget, but subject to State Aid Approval, the changes mean that SMEs can now claim R&D tax credits on 175% instead of 150% of their investment. This means qualifying businesses can claim a share in a national pot estimated at around £300 million.”

Jean-Paul Quertier added that the size of companies that qualify for this relief has also been raised from 250 to 500 employees, with the associated limits on balance sheet value also doubling.

“The South West economy is predominately characterised by small businesses,” he said, “but there are still many that can benefit from this measure, if they take the right advice. 

“The aim is to encourage more SMEs to invest in developing new and improved products as well as other innovative schemes.”