Generous R&D tax incentives are available to encourage innovation in the UK yet many companies remain unaware of the potential relief available or are sceptical of their ability to make a valid claim.

The tax incentives work by reducing corporation tax for tax-paying companies. For those companies in a loss-making position, the incentives can result in cash repayments from HM Revenue and Customs (HMRC) of up to 24% of the qualifying R&D expenditure.

In March 2006 Deloitte undertook a survey of Small and Medium Enterprises (SMEs) across the UK to explore companies’ experiences of the R&D tax relief system. Our aim was to measure actual and potential uptake of the benefit, and to investigate areas of difficulty in claiming the available relief. In total, we surveyed over 500 companies nationally, including 54 companies from the London region, spanning a variety of industry sectors.

For more information, download our 'Analysis of the use of R&D tax relief by SMEs in London' (171KB, PDF).