Most UK Small Firms Unaware of IT Tax Break

by Jason Gorringe, Tax-News.com, London

04 July 2003

The majority of small and medium sized businesses which qualify for the 100% IT purchase first year write off are not claiming the tax break, according to a recent survey conducted by Microsoft.

The Chancellor of the Exchequer, Gordon Brown, in his budget speech earlier in the year announced an extension to the provision until 31st March 2004. However, the survey conducted by Microsoft's small business advisory service, bCentral.co.uk, found that a stunning 89% of those firms that are eligible to claim the credit were unaware that the tax break existed.

The survey also indicated that around 40% of these small firms would like to invest in or upgrade their information technology systems, but consider the costs prohibitively high, drawing attention to the fact that many businesses may be struggling unduly.

According to John Coulthard, small business manager at Microsoft, the amount of unclaimed tax credits could be as large as £13 million.

Firms that are eligible to claim the tax break must have a turnover of less than £2.8 million, assets of less than £1.4 million and a work force of no more than 50 employees.

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