Businesses in Wiltshire are spending more than in any other local authority in the South West on research and development.
Figures released by HMRC, and collated by Swindon-based audit, tax and consulting firm RSM, show firms in the county spent £130 million on R&D and made 225 a total of 225 claims for tax relief totalling £20 million in the tax year 2015-16.
Swindon businesses made 50 claims totalling £5 million against R&D expenditure of £45m.
Topping the number of claims in the region was Gloucestershire, with 380 totalling £20m, against expenditure of £115 million followed by Devon with 230 claims totalling £10 million against expenditure of £85 million.
In total, businesses across the South West submitted 2,040 claims for tax relief for R&D expenses in 2015-16, claiming some £130m, a 17 per cent year on year rise in the number of claims and a 4 per cent rise in the value of claims.
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 – typically loss making businesses.
The statistics, which for the first time provide a detailed analysis of R&D claimants by region and sector, are skewed in that the geographical analysis is based on companies’ registered offices.
As a result, London tops the leaderboard for the number of claims. It is also little surprise that over 40 per cent of claims in the capital are in the software and technology sector.
The South West takes sixth spot among the UK regions, with the largest number of claims being in the manufacturing sector (31 percent of the total), followed by the information and communication sector (24 percent), and the professional, scientific and technical sector in third place (20 percent).
Commenting on the new numbers, Sharon Omer-Kaye, office managing partner at RSM in Swindon said: "While it is positive that overall R&D claim numbers across the South West continue to rise, it’s not clear whether this is down to a large number of new businesses claiming, or whether it is those businesses late to the party in terms of making claims – we suspect it is the latter.
"The national figures show wide disparities between different sectors and different regions which is due in large part to ongoing lack of awareness of how the relief can apply.
"The truth is that many more companies in Swindon and across the South West are undertaking research and development work but they aren’t recognising that this could be eligible for tax relief, despite the high levels of HMRC engagement and support through the R&D Consultative Committee and other measures."