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Research Finds London Dominates in R&D Tax Credit Claim Value

Illistrated concept of research and development. A laptop screen with a microscope, magnifying glass, lightbulb, and science beaker

Newly released HMRC figures show London-based companies once again securing a major share of R&D (research and development) tax relief with over £2.3bn paid out in 2019-20. Other strong performing areas include the West Midlands, Cambridgeshire, Oxfordshire, and Surrey where businesses collectively secured almost £1.3bn in tax relief for innovation-focused investment. Other regions securing significant R&D rebates include Greater Manchester, Hertfordshire and Hampshire. (see FIGURE 1 below).

Businesses in Mid Ulster, however, have claimed the top spot in R&D tax claims intensity in the UK according to this year’s UK Innovation Intensity League Table, published by innovation funding specialists ABGI-UK. It shows the leading 20 unitary authority areas (see FIGURE 2 below) which are ranked on the percentage of local businesses making a successful claim for R&D tax relief.

Mid Ulster (which was 3rd two years ago) tops the table with a total of 400 successful claims made by local SMEs and large businesses, representing 6.1% of all enterprises within its unitary authority area. Cambridgeshire placed second in this year’s table (up from 4th) with 5% of its businesses securing a successful claim. Nottingham placed 3rd in the table (up from 7th two years ago) with 4.8%.

Commenting on the rankings, Scott Henderson, Chief Executive at ABGI-UK said: “As our Innovation League Table shows, there many parts of the UK where companies are heavily investing in research and development activities. As our top three areas of Mid Ulster, Cambridgeshire and Nottingham demonstrate, there is a lot of innovation going on outside the M25 corridor.

“Companies within key sectors including manufacturing, engineering and IT/software are mainly behind this strong regional placement in our league table. By securing R&D tax relief for their innovation investment, a significant proportion of companies are benefitting by enhancing competitiveness. More of this investment activity will be critical in kick-starting the UK economy as we emerge from the recent public health crisis.”

 

See the tables:

FIGURE 1

Top 20 UK areas in total amount of R&D tax relief claimed 2019-20 (£m)*

1

Inner London

1,980

11

Northamptonshire

 120

2

West Midlands

 375

12

Essex

 120

3

Cambridgeshire

 365

13

Warwickshire

 110

4

Outer London

 340

14

Kent

 100

5

Oxfordshire

 280

15

City of Edinburgh

 90

6

Surrey

 275

16

West Sussex

 85

7

Greater Manchester

 245

17

Tyne and Wear

 80

8

Hertfordshire

 220

18

Merseyside

 70

9

Hampshire

 195

19

Reading

 65

10

West Yorkshire

 150

20

Lancashire

 60

*Figures in £ millions, rounded to nearest £5m

 

 

FIGURE 2

The UK R&D Claim Intensity league table

Top 20 unitary authority areas by ‘R&D Claim Intensity’ – the number of claims in relation to overall number of businesses in the area for 2019/20**

1

Mid Ulster

6.1%

11

City of Edinburgh

4.3%

2

Cambridgeshire

5.0%

12

Tyne and Wear

4.2%

3

Nottingham

4.8%

13

Herefordshire

4.2%

4

Aberdeen City

4.7%

14

Warwickshire

4.1%

5

Halton

4.7%

15

Bridgend

4.1%

6

Belfast

4.6%

16

Kingston upon Hull

4.0%

7

Flintshire

4.6%

17

Inner London

3.9%

8

Wrexham

4.6%

18

Oxfordshire

3.9%

9

Blackburn with Darwen

4.5%

19

Cardiff

3.7%

10

Lisburn and Castlereagh

4.4%

20

Staffordshire

3.7%

** Figures are based on the most recent (2019-20) R&D tax relief claim statistics produced by HMRC in relation to the number of enterprises in each UK unitary authority area, based on UK Government statistics: https://www.gov.uk/government/statistics/corporate-tax-research-and-development-tax-credit

Numbers of claims made are rounded to the nearest £5m, in line with HMRC statistics.

 

About ABGI

ABGI UK is part of the ABGI Group, sharing a heritage going back over 30 years. ABGI Group secures over £1bn in tax credits and grant funding every year for many of the world’s best-known brands including Hermes, one of the UK’s largest parcel delivery firms, automotive giant Fiat and global digital industrial company General Electric.

Operating throughout the entire value chain of innovation, ABGI Group is dedicated to helping clients accelerate innovation and business expansion around the world from our regional headquarters in the United Kingdom, France, Brazil, Canada, and the United States.

Established in the UK 15 years ago, with offices in London, Cambridge, Birmingham, Manchester, Newcastle, Belfast and Edinburgh, ABGI UK is an innovation funding specialist, combining an international perspective with local experience and expertise for the benefit of UK-based clients.

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