Ed­in­burgh tops Scot­land’s R& D tax re­lief league ta­ble

● Of­fi­cial fig­ures also show big rise in claims over­all ● But ex­perts say many busi­nesses still miss­ing out

The Scotsman - - BUSINESS - By SCOTT REID [email protected]­man.com

Ed­in­burgh has emerged as Scot­land’ s hotspot for re­search and de­vel­op­ment tax re­lief claims, though many firms are still miss­ing out on po­ten­tial pay­outs.

Busi­nesses based in the City of Ed­in­burgh topped the league for the num­ber of claims for R& D tax cred­its in 2017 – the lat­est year for which of­fi­cial fig­ures are avail­able – at 425 claims, fol­lowed by Glas­gow City on 335 and Aberdeen City with 250.

In to­tal, busi­nesses across Scot­land sub­mit­ted 1,900 R& D claims, gain­ing some £ 175 mil­lion in tax re­lief, ac­cord­ing to RSM, the ac­count­ing and busi­ness ad­vi­sory firm, which cited HMRC statis­tics.

Com­pared to the data re­ported for the pre­vi­ous year, pub­lished in Fe­bru­ary 2018, this rep­re­sents a 50 per cent rise in the num­ber of claims and a 6 per cent rise in the amounts claimed in R& D tax cred­its.

RSM said the largest num­ber of claims came from pro­fes­sional, sci­en­tific and tech­ni­cal com­pa­nies ( 515) which col­lec­tively claimed £ 35m, fol­lowed by man­u­fac­tur­ing firms ( 500), claim­ing £45m, then in­for­ma­tion and com­mu­ni­ca­tions busi­nesses (425), which claimed £ 25m.

The tax cred­its are a tax re­lief de­signed to en­cour­age more re­search spend­ing, lead­ing in turn to greater in­vest­ment in in­no­va­tion pro­cesses.

Dougy Agnew, a tax part­ner at R SM in Aberdeen said: “Com­pared to the data re­leased last year, the lat­est fig­ures show a healthy rise in the num­bers of ap­pli­ca­tions for R& D tax cred­its, and higher pay­outs for Scot­land-based busi­nesses in­volved in R& D ac­tiv­ity.

“While this is very en­cour­ag­ing, there are some sec­tors – con­struc­tion in par­tic­u­lar – where the num­bers of claims are neg­li­gi­ble, de­spite the like­li­hood that many are in­volved in R& D ac­tiv­ity.

“The fact is there are many more busi­nesses across Scot­land that are un­der­tak­ing R& D work but are miss­ing out on the R& D tax credit pay­ments to which they are en­ti­tled .”

Sep­a­rate re­search pub­lished re­cently sug­gested that Aberdeen had grabbed pole po­si­tion as Scot­land’s in­no­va­tion hotspot.

The Gran­ite City re­tained top spot in R& D tax claim firm Jump­start’s in­no­va­tion league ta­ble, boast­ing the high­est pro­por­tion of R& D tax re­lief claimants of any lo­cal au­thor­ity area in Scot­land.

Scott Hen­der­son, man­ag­ing di­rec­tor at Jump­start, said: “[ The ta­ble] shows Aberdeen busi­nesses once again lead­ing the way in mak­ing suc­cess­ful R& D tax re­lief claims.

“The city’s oil and gas sec­tor con­tin­ues to in­vest in in­no­va­tion to im­prove op­er­a­tional pro­cesses and en­hance com­pet­i­tive­ness in the global mar­ket place.”

He added: “It is not sur­pris­ing to see many ru­ral ar­eas in Scot­land rank­ing fur­ther down the list.”

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