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

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.”