UK businesses’ research and development investments climb to record £47bn
The amount spent by UK businesses on research and development has jumped 15 per cent to £47bn last year, a record high and up from £41bn the year before, according to new data shared with Morning Wire this morning.
says UHY Hacker Young, the national accountancy group.
The figures show that UK businesses also claimed a record £7.4bn in R&D tax relief last year, up 19 per cent from £6.3bn the previous year, according to the figures compiled by accountancy group UHY Hacker Young.
The R&D tax credit scheme incentivises businesses to undertake R&D by allowing them to offset costs against their corporation tax bill. SMEs accounted for £4.4bn of these R&D tax credit claims in 2019/20, up from £3.5bn the year before.
Investments per industry
Industries spending the most on R&D include manufacturing, up 8 per cent to £14.1bn in 2019/20, up from £13.1bn in the year before that.
Tech, information and communication were up by more than a quarter, to £7.7bn, in 2019/20, from £6.2bn in 2018/19 while wholesale and retail spent 11 per cent more on research and development, namely £2.7bn in 2019/20, compared to £2.4bn in 2018/19.
“The increase in R&D spending is a great sign for the UK economy. It suggests more businesses see the value of innovation in helping to increase turnover, productivity and employment,” commented Sasha Talbot, R&D Tax Manager at UHY Hacker Young.
Talbot told Morning Wire: “The R&D tax relief is a long-term driver of growth within businesses. This tax break is going to play a key role in getting the UK’s economy back to health, following the pandemic-related hit.”
“The R&D tax credit scheme has already helped thousands of businesses. However, we suspect some businesses are still unaware that they qualify for the tax relief,” Talbot concluded.