Nine in ten UK law firms could be eligible for research and development (R&D) tax relief on new services but less than half have ever claimed, research from tax relief firm Catex has revealed.
Research shows that in the past two years 87 percent of businesses in the legal sector have developed new products or business processes, which means they are in line for valuable R&D tax relief that the UK Government provides to encourage innovation.
However, despite 80 percent of firms knowing this, only 47 percent of firms ever claim it, either because they don’t think they qualify or they believe that it could cost them money, the Catax study found.
According to the Censuswide survey, law firm executives underestimate the value of the average SME R&D tax relief claim by £29,167 as they believe the average value to be just £16,833 when the actual figure is £46,000 for firms nationwide. It is said that law firms report spending £178,002 on R&D on average.
Claims can be backdated at least two years and R&D doesn't have to have been successful to qualify.
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