Midlands R&D tax relief claims on the rise

THE latest Government statistics show that the number of claims for research and development (R&D) tax relief by businesses in the Midlands has risen by 19% since last year.

The news has been welcomed by Birmingham accountancy and advisory firm Baker Tilly.

First introduced in 2000, R&D tax credits were designed to encourage research activities and incentivise spending on innovation. Since then, nearly 120,000 claims have been made, with more than £11.4bn claimed in tax relief.

Last year the Chancellor announced an increase in R&D tax credits to 230%. This means that for each £100 of qualifying costs, the corporation tax paid by SMEs could be reduced by up to £46.

Rebecca Reading, corporate tax partner at Baker Tilly in Birmingham, said: “It’s great that even more businesses are taking advantage of R&D tax credits. This increase in the number of claims shows that confidence is beginning to return with investment being made in research and development, not just within the region, but to the UK as a whole.

“Using the tax system to incentivise innovative business has been a smart and popular move by the Government, and one that is clearly going to give a much-welcome boost to the UK economy.”