Number of SMEs claiming for R&D tax reliefs has risen by nearly a quarter, official figures show.
According to the figures, the number of claims for R&D tax credits is up from around 16,000 in the previous year, to approximately 20,000. This represents a rise in the amount claimed from £1.4bn last year to £1.75bn.
The largest number of claims was made by SMEs, which rose 23% on last year, with claims by large companies up 4%.
All the regions showed increased numbers of claims made, with London, south-east and the east continuing to make the highest number of claims in the year – a total of 46%.
First introduced in 2000, R&D tax credits were designed as a tax relief to encourage greater R&D spending and innovation. Since then, almost 120,000 claims have been made, with more than £11.4bn claimed in tax relief.
Recognising their popularity and in a bid to further boost innovation, last year the chancellor announced an increase in R&D tax credits to 230%. This meant that for each £100 of qualifying costs, the corporation tax paid by SMEs on income could be reduced by an additional £130 on top of the £100 spent.
Colin Smyth, Baker Tilly tax partner, said: “These figures are great news for business, and show that real confidence is beginning to return to the UK economy.
“Using the tax system to incentivise and innovate business has been a smart move by the government, and one that is clearly continuing to give a much-welcome boost to the UK economy.”