Small and medium-sized business (SMEs) are looking to expand next year, but many are not aware of the various tax breaks and tax incentive schemes targeted at the sector, according to research by accountancy firm Baker Tilly.

The firm's survey of 750 SMEs for Your Business Outlook 2014 report found that 45% are either extremely confident or confident about growth opportunities over the next 12 months, and 48% said they expected to increase turnover by 5% or more over the same period.

However, only 15% knew about R&D tax credits, despite the government launching the scheme nearly 14 years ago and recent moves to make the tax breaks more generous in order to encourage innovation. Other tax incentive schemes had a similarly low profile, with only 8% of respondents knowing about the Seed Enterprise Investment Scheme (SEIS) and just 4% aware of the Patent Box.

Baker Tilly says the HMRC's own data shows that most of the R&D tax relief claimed in 2011-12 was by large companies (£780m) rather than SMEs (£420m).

According to the firm's survey, only one tax incentive - Capital Allowances - was recognised by more than half of respondents (55%). The survey did find however, that once businesses knew about an incentive, they tended to use it, suggesting that knowledge was the main issue, rather than perceived scheme effectiveness.

George Bull, tax partner at Baker Tilly, said: 'There's clearly an issue of awareness that the government needs to address, but SMEs also need to take responsibility for finding out about R&D and other tax breaks on offer, in order to take advantage of all opportunities to grow. Anecdotal evidence suggests there is a perception that R&D refers to lab-based work only, whereas a whole range of innovative measures in SMEs can be classified as R&D.'