Gloucestershire tops South West R&D tax credit league

Published by

Nicky Godding

Gloucestershire-based businesses topped the league for the number of claims for R&D tax credits in 2016-17 at 540 claims, followed by Bristol on 405 and Devon on 345, according to new data published by HMRC has revealed the hotspots for R&D tax relief claims across the South West.

In total, businesses across the South West submitted 3,100 R&D claims in 2016-17, claiming some £180m in tax relief. Compared to the data reported for the previous year published in February 2018, this represents a 52 per cent rise in the number of claims and a 38 per cent rise in the amounts claimed in R&D tax credits.

The largest number of claims across the region came from manufacturing companies (875) which collectively claimed £610m, followed by information and communications firms (770) which claimed £180m, followed by professional, scientific and technical businesses (635) which claimed £30m.

R&D 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 to corporation tax or providing a cash injection for companies without a tax liability (i.e. loss-making businesses).

Andrew Gordon, a tax partner at RSM in Bristol 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 payouts 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.'

Nicky Godding

Nicky Godding is editor of The Business Magazine. Before her journalism career, she worked mainly in public relations moving into writing when she was invited to launch Retail Watch, a publication covering retail and real estate across Europe. After some years of constant travelling, she tucked away her passport and concentrated on business writing, co-founding a successful regional business magazine. She has interviewed some of the UK’s most successful entrepreneurs who have built multi-million-pound businesses and reported on many science and technology firsts. She reports on the region’s thriving business economy from start-ups, family businesses and multi-million-pound corporations, to the professionals that support their growth and the institutions that educate the next generation of business leaders.