The government is being urged to implement reforms to the Research and Development (R&D) tax relief system in order to avoid hurting small companies by the Suffolk Chamber of Commerce.

A report released by the Chamber found that recent changes by HMRC and a 'wild west' regulatory system in regard to who can act as R&D tax advisers are 'undermining confidence and take-up'.

The Chamber collected a number of case studies and original survey research, which showed that 46% of small companies are deterred from making future claims based on their latest experience.

Chair of the Chamber's R&D Tax Reliefs Task and Finish Group, Steve Elsom, said:

'Our original research into local businesses' experiences shows that the lack of knowledgeable experts at the HMRC, plus the imposition of an overly strict compliance regime is causing many legitimate companies' most recent claims to be delayed and/or refused, with others fearful that previously successful claims from previous years might now be challenged.

'Every right-thinking person applauds the crackdown in fraudulent claims, but HMRC appears to be going to extremes in its definition of the term. Our research showed that companies which might have made a very minor administrative error in their application are counted as fraudulent.’