Capital hotspot for R&D claims

New data published for the first time by HMRC has revealed the hotspots for R&D tax relief claims across Scotland with Edinburgh taking top billing.

Capital-based businesses topped the league for the number of claims for tax credits in 2015-16 at 290, followed by Glasgow on 225 and Aberdeen on 180.

In total, businesses across the country submitted 1,265 claims for tax relief for research and development expenses during the period, claiming some £165 million – increases of 5 per cent and 74 per cent on the previous year in terms of the number and value of claims, respectively.

R&D tax credits are a tax relief designed to encourage greater research and development spending, leading in turn to greater investment in innovation.

Figures earlier this week suggested that Scotland was lagging behind its Scandinavian counterparts on innovation with significantly fewer patent applications being filed.

Scottish intellectual property firm Marks & Clerk analysed data from Norway, Denmark and Scotland – which each have similar populations – over the past two years and found that the two Scandinavian countries have filed a significantly higher number of European patent applications since January 2016.

Commenting on the HMRC numbers, Stephen Hay, RSM’S head of tax in Scotland, said: “While it is positive that overall R&D claim numbers and values across Scotland continue to rise, it’s not clear whether this is down to many 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 largest proportion of claims in Scotland were in the manufacturing sector.”