Yorkshire Claiming Most R&D Tax Credits

Among all the UK’s regions, Yorkshire and the Humber are leading the way in the amounts of R&D Tax Relief claimed. The area saw an impressive growth rate of 23.7%, as per new Government statistics analysed by software provider, Ryan.

Surge in Yorkshire’s Innovation Spending

R&D expenses, considered to be a high return investment, rose from £1.56 billion in the 2020/21 fiscal year to an astounding £1.93 billion in 2021/22. This expansion highlights a promising trend in the region and indicates bright prospects for innovation, market competition, and economic growth.

HMRC Data and Tax Relief for R&D

This was gleaned from HM Revenue and Customs (HMRC), which monitors claims made for R&D tax relief, a system that rewards businesses that qualify with innovation. This tax relief was first introduced in 2000 as a way to incentivise and reward creative thinking in pursuit of scientific or technological advances. It results in either a reduction in corporation tax bills or provides a lump sum payout for companies that successfully resolve a scientific or technological uncertainty.

The number of tax relief claims in this area is also on an upwards trend. Yorkshire businesses recorded a 6% rise in R&D project tax relief claims, totalling to 6,805 claims. Yorkshire and the Humber businesses took advantage of £370 million in R&D tax relief, averaging £54,371 per claim.

Nationwide Innovation Spending in Context

While the R&D spending trends are looking optimistic in Yorkshire and the Humber, the entire UK reflected positive progress as well. The nationwide innovation spend by companies stood at £44.1bn for the fiscal year of 2021/22, showcasing an 8% rise; however, there’s a decreasing trend of first-time claimants for two years in a row.

Impact of R&D on Economy

Research and development ventures are not confined to mere academic experiments. Instead, they introduce new products and services to the market, driving a significant part of economic growth. Effectively, these projects increase foreign investment and boost exports, which leads to job creation, especially higher-skilled positions

Nigel Holmes, Director, Research and Development at Ryan, encapsulated the situation: “Yorkshire and the Humber’s R&D spend is a huge success story, growing faster than any other region. Equally promising is the surge in businesses making claims for R&D tax relief, increasing at a faster rate than nearly all other parts of the country. This innovation spending will be a tremendous boon to the region, as it helps to drive economic growth, job creation, and attract more inward investment.”