The number of claims for R&D tax relief made by companies in the Midlands has increased by 19% in the past year. First introduced in 2000, R&D tax credits were designed to encourage spending on innovation.

Since then, nearly 120,000 claims have been made, with more than £11.4 billion handed back to business. Last year, the Chancellor of the Exchequer announced an increase in R&D tax credits, meaning that for each £100 of R&D, the Corporation Tax paid by SMEs could be reduced by up to £46.

Rebecca Reading, corporate tax partner at the Baker Tilly accountancy group (www.bakertilly.co.uk) in Birmingham, said: “It’s great that even more businesses are taking advantage of R&D tax credits.

“This increase in the number of claims shows that confidence is beginning to return. Using the tax system to incentivise innovative business has been a smart and popular move by the Government, and one that is clearly going to give a welcome boost to the UK economy.”