And, even when senior managers and owners at smaller UK engineering firms have heard of R&D tax relief, more than a third (36%) believe it is restricted to specialist hi-tech science or drug companies.

The findings come from a Censuswide survey of 500 senior managers and business owners by specialist tax relief experts Catax.

Additional findings show that 55% of respondents say they have spent time and money ‘developing a new product or process over the past three years’ meaning that the likelihood is that more than half of British engineering firms could be due a sizeable tax windfall, Catax says.

Meanwhile, 35% of the engineering firms polled mistakenly believe that any eligible R&D activity must be successful for a claim to be made. Catax says that this is not true: the outcome of the R&D is irrelevant – what matters is the time and money spent developing the new technology, processes or techniques.

Says Catax chief Mark Tighe: “British engineering firms are recognised around the world for the sheer depth of their innovation. But in far too many cases the tax relief available to the companies driving this innovation is being overlooked, often at great cost.

“This is especially the case with smaller engineering firms, which may not have access to the tax resource and expertise of their blue chip counterparts. It’s crucial engineering firms seek advice about the tax relief they are due for the valuable R&D they are carrying out, which will often amount to tens of thousands of pounds.”