Tech firms not using tax breaks

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Half of UK tech firms haven’t taken advantage of tax credits for research and development that were brought in during the last budget.

So claims a survey by PricewaterhouseCoopers, which also found that 80 per cent of UK tech firms didn’t use environmental tax credits to get cash back.

Barry Murphy, head of UK technology for the firm, said firms may not see their R&D as anything special. “As regards research and development, the low take up may indicate tech companies do not view what they do as innovative, or are put off by a complex claims process,” he said in a statement.

“In fact, many UK tech companies assume they are not at the cutting edge of technology, therefore don’t apply, but are actually entitled to that all-important relief,” he added.

As the UK economy is so dependent on innovation and technology, Murphy called on firms to take advantage of the funds on offer. "It’s now time for people to review their claims and tap into as much tax relief as possible. This is particularly important in a tough investment environment,” he added.

However, he also called for the government to simplify the tax system. "Getting the policies right to encourage early and second stage capital investment is key to future growth in UK technology, however constant tinkering with the tax regime causes companies to disengage,” he said.

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