New data published by HMRC has revealed the hotspots for R&D tax relief claims across the South West.
In total, businesses in the region submitted 3,100 R&D claims in 2016-17, totalling some £180m in tax relief, a 52 per cent rise in the number of claims made in the previous year and a 38 per cent rise in the amounts claimed.
Wiltshire made the fourth greatest number of claims with 310 totalling £5m, while Gloucestershire-based businesses topped the league at 540 claims worth a combined £25m.
The largest number of claims across the region came from manufacturing companies (875) who collectively claimed £610m, followed by information and communications firms (770) who claimed £180m, and professional, scientific and technical businesses (635) who claimed £30m.
Research and Development tax credits are a tax relief designed to encourage greater R&D spending, leading in turn to greater investment in innovation. They work by either reducing a company’s liability for corporation tax or providing a cash injection for companies without a tax liability (i.e. loss-making businesses).
Sharon Omer-Kaye (pictured), a tax partner at RSM in Swindon, said: “Compared to the data released this time last year, the latest figures show a healthy rise in the numbers of applications for R&D tax credits, and higher pay-outs for South West-based businesses involved in R&D activity.
“While this is very encouraging, there are some sectors – construction in particular – where the numbers of claims are negligible, despite the likelihood that many companies are involved in R&D activity.
“The fact is there could be many more businesses across the South West that are undertaking R&D work but are missing out on the R&D tax credit payments to which they are entitled.”