However, many small to medium sized enterprises don't realise that they could qualify for tax relief, and be sitting on substantial savings, if only they stepped back and put their business under the microscope.
R&D (research and development) tax reliefs are currently generous, and allow companies that carry out qualifying R&D projects to claim a tax deduction of up to 225% on the costs. So, for example, if a company spends £100,000 on a qualifying project, it will be able to claim a tax deduction of £225,000. If the company is paying corporation tax at 20%, then the resulting saving would be £25,000.
The spend on the project is considered in a broad sense too - research and development costs can include employees' salaries, materials, subcontracted development work, software and utilities (power, water and fuel).
But my business isn't involved in R&D - that's all done in "hi-tech" companies that are involved in cutting edge technologies, isn't it?
The short answer to this is - no. This is why many companies fail to claim the relief. Innovation can take many forms such as developing new ways of working or a new product to solve an issue for a particular client.
The majority of businesses that we have spoken to have been happily ticking along under the impression that they do not carry out R&D work. However, on further investigation, it has transpired that a number of these companies were indeed carrying out activities that qualify for the R&D tax reliefs. They were undertaking work that contributed to advancement in their field - either in terms of improved knowledge, ways of working, increased capabilities or problem solving.
In many cases, these activities can result in tax repayments from HMRC. Two recent cases saw companies receiving tax repayments exceeding £90,000.
It is often not realised that the activities of a company will qualify as R&D when its employees are simply carrying out their day-to-day work. However, where these employees are specialists in their field, their work could very well be classed as R&D.
And, far from being the sole domain of hi-tech companies with boffins making complex scientific discoveries, the relief is open to companies that operate in most business sectors. Industrial engineers, civil engineers, architects and manufacturing, financial services and telecoms companies are amongst those that have benefited.
So I may qualify for relief, but surely this is one of these high risk tax avoidance schemes? I don't want to attract negative attention; either from the media, or HMRC.
Some business owners are under the impression that tax relief equals tax avoidance. Nothing could be further from the truth. The reliefs were introduced by the UK Government to encourage companies to invest in new thinking in their specialist field - the results of which would ultimately strengthen the UK's economy by cranking up innovation and wealth creation. The scheme simply allows businesses to recover some of the costs of being creative, rising to customer and market challenges and developing your business beyond core operations.
Each case will succeed or fail upon its own merits - success is not guaranteed. However, it is worth asking the two key questions. Do we innovate in our day to day business - either in product, function or service? Should we investigate all the tax saving options open to us? If the answer to either question is yes, it's time to take a closer look at R&D.
Iain Thomson is senior manager at Scott-Moncrieff business advisers and accountants.