Your Local Independent 202

Page 22 December 2025 AD SALES 01204 478812 THERE has been a marked fall in the number of SMEs in the North West making Research & Development tax relief claims, according to research by accountancy firm Azets. The drop has prompted a spe- cialist at the firm to warn that businesses in the region should use the valuable tax relief support – or lose it. Becca Murdoch, a tax director with Azets, which has an office in Horwich, issued the warning after analysing the latest HMRC figures for 2023-24. They show claims by firms in Cheshire falling from 865 to 615 compared to the previous year. In Greater Manchester the figure fell from 2,290 to 1,495. Becca said: “We are finding that the reduced benefit for SMEs, latest compliance rules and rela- tively high time and cost invest- ment to make an R&D claim are discouraging SMEs, in particular smaller SMEs.” Claims by SMEs – which account for nearly 99 per cent of businesses in the UK – fell by nearly one-third compared to the previous tax year. Just under 47,000 R&D tax credit claims for 2023-24 were made over- all, a fall of just over a quarter. Tax reliefs can be between £15 to £27 for every £100 spent on R&D, based on the government’s own figures. Becca added: “The decrease, seen locally and across all the regions, is a crying shame because this kind of funding pays the people who help local businesses develop new and exciting tech- nologies, which in turn grow the regional and wider economy. “Innovation costs considerable money – and a lot of innovation wouldn’t happen without taxpayer support because loss-making com- panies wouldn’t risk bankrolling further financial hits and profit- able ones may fear being dragged into the red without recourse to public money to offset R&D outlay. “Yet successful innovation can generate new revenues for busi- nesses and create new taxes which more than cover what was put in by the taxpayer. Companies with genuine claims should not be put off.” She added: “Worryingly, the gov- ernment’s figures show that SMEs aren’t making as many R&D tax credit claims, with a decrease of nearly one-third compared to the previous year, and this is undoubt- edly a direct consequence of the latest compliance rules. Indeed, the number of claims last year for R&D tax credits by scheme overall was the lowest since 2016-17.” BUSINESS TO ADVERTISE CALL 01204 478812 £ SMES are missing opportuni- ties to innovate, grow, increase productivity and contribute more to the wider economy by not making effective use of artificial intelligence (AI), according to a new report. Research carried out among small business owners by Cen- suswide for Google revealed that 59 per cent of those questioned had paused “game changing” ideas, because they didn’t have time to bring their innovations to life. Almost two thirds (64 per cent) of UK SME owners believe that having more time to innovate could unlock significant revenue growth, with a third citing that their innovations could increase revenues by 30 per cent. Economic analysis from busi- ness management consultancy Public First has also shown that AI-powered tools could boost SME productivity by 20 per cent. This is comparable to adding an extra day to each working week – giving SME leaders more time to bring their game changing ideas to life. Against this backdrop, Lan- cashire County Council, in col- laboration with Code Institute, has launched a free AI Maturity Assessment to help businesses across the county understand their readiness for AI and identify the next steps in their journey. The partnership will help busi- nesses futureproof their opera- tions and contribute to a stronger regional AI strategy. It is designed to help businesses of all sizes, whether they’re just starting to explore AI or already implementing it by giving access to: � A personalised AI readi- ness report � A clear benchmark across six key areas: strategy, value, data, technology, people and governance � Actionable recommendations to bridge capability gaps � Access to expert-led guidance and short educational workshops The initiative will also con- tribute to shaping Lancashire’s future AI skills strategy and funding programmes by building a regional picture of where support is most needed. Companies can access the survey, which will provide themwith their free AI readiness report, through the website of Boost, Lancashire’s Business Growth Hub: www.boost- businesslancashire.co.uk LOCAL business leaders have delivered their verdict on Chan- cellor Rachel Reeves’ Budget – saying there was little in it to encourage growth or support smaller firms. She announced a package that will raise taxes by £26bn in 2029-30. The package of hikes announced will take the tax burden to an all-time high of 38 per cent of GDP, according to the Office of Budget Responsibility (OBR). Measures announced include freez- ing thresholds on personal tax and employer National Insurance contri- butions for three years from 2028-29 – a move that will raise £8bn. Roger Philips, tax partner at accountants PM+M, which has an office in Bury, said: “In a world where the success of the government’s eco- nomic policy is entirely dependent on the creation of growth, many will be left scratching their heads as to whether the government has missed an open goal to deliver amore credible, long-termplan to achieve that growth, which is so desperately needed.” He added: “With the decision being taken not to increase income tax across the board, the real burden comes via a further three-year freeze on income-tax allowances and thresh- olds, additional tax on investment income and new levies on expensive properties and consumption. I’m struggling to see anything in there that screams ‘growth creation’. “Businesses, particularly SMEs, have endured years of shifting pol- icies, and the announcements do little to resolve the complexity that continues to make business decision making tough. “The UK’s tax system remains unwieldy and complex. Public finances remain tight, and productiv- ity challenges persist – none of which have been meaningfully addressed.” Tina McKenzie, policy chair of the Lancashire headquartered Federa- tion of Small Businesses, said the tax-raising Budget showed “the peril of a continuing economic doom loop”. She said: “We must not be in the same place again next year, withmore tax hikes to balance the books due to a lack of economic growth. The tax bur- den at a record high is the cost of fail- ure to get growth and trim spending. “Hikes to dividend tax mean the government continues to make invest- ing in your own business one of the least tax-friendly things you can do with your money. “Plans to charge employers for supporting pension savings are a bad idea. The business rates measures will not help small firms and high streets nearly enough. Reeves’ big Budget: The verdict Growth call: Tina McKenzie “We need the government to fol- low this Budget through with serious, pro-growth measures that restore the confidence small businesses need to grow, invest and hire. Matthew Johnson, partner at Lan- cashire based accountants and busi- ness advisors WNJ, said the Budget would do little to raise the spirits of business owners. He said: “There was little in the way of incentives to encourage busi- nesses to invest in growth and raise the productivity the chancellor is so keen to see. “Instead, we have been given a range of tax hikes that may close the fiscal gap but do nothing to help SMEs facing pressures on multiple fronts.” And he added: “Many businesses will also be looking at the potential impact of the raising of the minimum wage. It will increase for over-21s by 50p per hour from April, to £12.71 – a rise of 4.1 per cent. Workers aged 18 to 20 will get a bigger increase of 8.5 per cent, to £10.85 an hour. And 16 and 17-year-olds will get a six per cent increase to £8 an hour. “Given labour costs are among the biggest barriers to growth, and the fact many businesses are still reeling from the increase in National Insur- ance contributions announced last autumn, the hikes may well put plans to increase staff numbers on hold. “SMEs employ nearly 60 per cent of the UK workforce. They are also the backbone of the county’s economy, and it is vital that they are supported. It is disappointing we have not seen more of that support that is needed. “Without a prosperous private sec- tor, the economy will shrink and have further downward pressure on total tax receipts.” Disappointed: Matthew Johnson How ready is your business for AI? Decline in R&D tax relief claims sparks warning Concerned: Becca Murdoch