Yorkshire and Humber Sees UK’s Biggest Growth in High-Reward R&D spend to Hit £1.9 Billion
02/10/2023
Scottish Businesses Increase High-Reward R&D Spending to Reach £1.9 Billion
04/10/2023
Manchester, 29 September 2023 – West Midlands business spending on the most valuable forms of innovation has risen by the third-highest amount out of all regions of the UK[1], according to analysis of new Government statistics by Ryan, a leading global tax services and software provider.
Expenditure on high-reward research and development (R&D) grew in the region by 16% rising from £2.9 billion in 2020/21 to £3.3 billion in 2021/22.
The data, released last week, is captured by HMRC and is based on claims made for R&D tax relief, which reward businesses for qualifying activity.
Alongside the increase in spending, the number of tax relief claims for R&D projects made by West Midlands businesses rose by 1.3% to 7,430 claims. In total, West Midlands businesses claimed £520 million in R&D tax relief, with an average claim value of £69,986.
Total claims and spending by region in 2020/21 v 2021/22
| Region | Total claims 2020/21 | Total Expenditure 2020/21 (£ millions) | Total claims 2021/22 | Total expenditure 2021/22 (£ millions) | Change in claims | Change in expenditure |
| North East | 2,725 | 755 | 2,835 | 710 | 4% | -6% |
| East Midlands | 5,885 | 1,940 | 5,790 | 1,855 | -1.6% | -4.4% |
| East of England | 8,185 | 5,040 | 8,770 | 5,095 | 7.2% | 1.1% |
| Scotland | 4,575 | 1,875 | 4,550 | 1,905 | -0.6% | 1.6% |
| South West | 6,600 | 2,015 | 6,880 | 2,085 | 4.2% | 3.5% |
| Wales | 2,685 | 740 | 2,640 | 770 | -1.7% | 4.1% |
| London | 18,130 | 12,725 | 19,780 | 13,680 | 9.1% | 7.5% |
| Northern Ireland | 2,280 | 800 | 2,270 | 885 | -0.4% | 10.6% |
| South East | 12,520 | 7,645 | 13,260 | 8,640 | 5.9% | 13% |
| West Midlands | 7,335 | 2,865 | 7,430 | 3,335 | 1.3% | 16.4% |
| North West | 8,990 | 2,580 | 9,220 | 3,030 | 2.6% | 17.4% |
| Yorkshire and The Humber | 6,395 | 1,560 | 6,805 | 1,930 | 6.4% | 23.7% |
Overall, UK-wide innovation spending that qualifies for tax relief rose 8% to £44.1bn in 2021/22. However, the number of first-time claimants has fallen for the second year running.
R&D projects carried out by UK companies introduce new products and services to the marketplace, which play a critical role in economic growth as they attract investment, boost exports and lead to the creation of more skilled jobs.
R&D tax relief was introduced in 2000 to encourage and reward innovation and results in either a reduction in a limited company’s corporation tax bill or a cash lump sum for companies seeking to resolve a scientific or technological uncertainty.
Nigel Holmes, Director, Research and Development at Ryan, said:
“West Midlands spending on R&D has surged ahead of most of the UK, growing at a faster rate than the country’s average.”
“At the same time, the number of businesses making claims for R&D tax relief has grown, which bodes well for the future.”
“It is important that business leaders in the region do what they can to encourage research and development to stimulate further economic growth and employment.”