Local firms have been urged to become more savvy about claiming tax relief for research and development costs.

According to Cleckheaton and Keighley accountants Clough & Company, the level of claims by Yorkshire firms rose by eight per cent last year – in line with the national trend – but practice boss Steven Gash believes many firms may be missing out.

Research by Clough & Company confirmed the rise in R&D tax relief claims processed in the region for its clients during 2012 and said the level of claims had been boosted by new incentives introduced by Chancellor George Osborne.

The research of claims for tax relief made to HM Revenue and Customs revealed that spending on research and development by UK businesses hit a record high of £11.9 billion last year – eight per cent above the 2011 level, with businesses claiming back £1.2 billion in tax relief for R&D investment.

Steven Gash said: “R&D tax relief is intended to drive productivity by encouraging innovation. Extending the tax credit for R&D spending by large businesses has encouraged businesses to increase their investment in innovation on a more long-term basis.

“Companies can receive up to 225 per cent tax relief on qualifying R&D costs which doesn’t just cover scientific development, as R&D applies to staff costs and consumables too, so its important businesses get the right advice to achieve the tax savings on offer.”

Clough & Company has recently completed R&D relief claims for two leading well-known manufacturing firms, NSF Controls in Keighley and Millers Oils in Brighouse, enabling them to secure significant tax relief.

Steven said: “NSF Controls is a leading UK manufacturer of solenoids, switches and sub assemblies for diverse applications and markets, from tonal control on an electric guitar to missile release control on the Tornado aircraft.

“The company’s development team spends a huge amount of time designing and testing new products to overcome technical flaws and create some of the most innovative products on the market. We were able to help NSF Controls achieve a £40,000 tax saving on projects already completed and have identified further tax savings for the future.”

Millers Oils produces lubricants for the industrial, commercial vehicle and automotive markets and pioneered the use of nanotechnology in lubricants by initially developing low friction oils for use in motorsport.

Steven said: “We have been able to help Millers Oils receive significant tax relief on its ground-breaking innovations and are keen to make other businesses in the region aware of how they can qualify for the tax relief.”