HIGH-TECH companies in Worcestershire and Herefordshire are being urged to take advantage of tax incentives on research and development.

The government scheme, extended in this year's budget, is a major incentive to stimulate R&D in the economy.

But Liz Peters, tax partner with Kendall Wadley Chartered Accountants, thinks companies are missing out.

"The innovators and scientists are brilliant at turning technology into cutting-edge products," said Ms Peters, who advises several local high-tech businesses for Kendall Wadley, which has offices in Worcester, Malvern and Hereford.

"But, by making tax work for them, they can build excellent businesses as well.

"This is a powerful incentive but it's easy to lose, so advance research on tax is vital."

She said companies at the forefront of innovation could receive a 150 per cent tax deduction back from the government against money spent on R&D.

"That means on a £100,000 R&D budget, they can get £150,000 back against profits."

Worcestershire's high-tech sector is a growing part of the local economy and is set to expand with the development of the A38 Technology Corridor, which runs from Birmingham University to the Malvern Hills Science Park.

The corridor is intended to help businesses in the area benefit from planned infrastructure development in transport, broadband communications, academic and research facilities and new premises.

It is being championed by regional development agency, Advantage West Midlands.

"High-tech manufacturing and service businesses rely on on-going R&D to grow," added Ms Peters. "But to achieve the best growth rates, they must get their finance and the tax breaks worked out.

"Major opportunities for recouping investment in pure and applied research and development are there for the taking."

High-tech businesses include those in telecommunications, computer and information services, aerospace, pharmaceutical and medical research, computer manufacture and materials manufacture, such as polymers and conductors.