South East businesses claim £1.3 billion for innovation
South East businesses claimed the second-highest number of research and development (R&D) tax credits than any other region for the 19/20 financial year. London claimed the first spot, according to HMRC’s R&D tax relief report, which was released on 30 September 2021.
£1.3 billion was received by South East registered businesses, with a total of 12,740 claims, a number that will continue to grow as 19/20 years remain open for claims until March 2022. The average claim amount was £104,000.
The report shows a 20% increase in the total amount claimed by South East businesses, with a 17% increase in the number of claims, from tax year 18/19 to 19/20.
According to the report, the sectors where the highest number of R&D claims across the UK were made are information and communication (22%), manufacturing (22%) and professional, scientific and technical (19%) sectors, accounting for 20%, 25% and 24% of the total amount claimed, respectively.
Tax specialist at R&D tax specialists Access2Funding, Leslie Maloney said: "The uplift in the number of R&D tax relief claims in the South East represents an increasing awareness of HMRC’s tax relief scheme and increasing innovation within the region, which is wonderful to see.
"The key take-aways from this year’s R&D tax credit report are the two growth areas in professional, scientific and technical and information and communication, both of which saw significant expansion in number of claims made in 2019-20.
"I personally believe this report shows opportunity for real growth for innovative businesses in the South East, particularly in those high growth sectors and a shift towards the new economy. The more traditional sectors like manufacturing and construction have been claiming R&D for many years and we expect this to continue but for professional, scientific and technical and information and communication to be the main drivers of growth in helping the country to recover economically. This will be reflected in 2022’s report."
The average claim value across the UK is sitting at approximately £57,000. There has however been an increase in the number of claims made from last year, from 74,200 to 85,900 and this figure will certainly increase.
R&D tax credits are an HMRC incentive to encourage UK businesses to continue to grow by innovating. The incentive being a reduction in corporation tax or a cash payment.
About Access2Funding
Access2Funding is an R&D Tax Relief specialist with teams across the UK, including England, Scotland, Northern Ireland, and Wales. It is an ACCA-approved employer with an annual turnover of £4.5million. It has so far claimed back over £44m of R&D for businesses and has offices across the country, from the Scottish Highlands across to Northern Ireland and down to and Kent.
