Financial secretary to the Treasury, David Gauke, has launched a new research and development (R&D) plan, which provides an outline of how the Government aims to make the process for claiming tax relief easier for those small businesses investing in R&D.
Following an HMRC consultation on the matter, the two-year plan seeks to expand the number of businesses claiming R&D tax relief by promoting the relief amongst small businesses and making applications simpler.
The relief is designed to encourage investment in product development.
It also aims to aid companies in reducing the levels of corporation tax that is paid on profits by offsetting them against R&D investment.
From 2013 to 2014, over 15,000 SMEs claimed the tax relief. This figure is 19% higher than the year before.
Commencing from November, those smaller companies with a turnover of £2 million or less and who employ fewer than 50 employees are able to obtain advance assurance on R&D tax relief.
HMRC will begin to investigate new ways to improve communication on the issue of R&D tax relief.