The reward that UK manufacturing businesses are reaping from tax breaks for research and development (R&D) has leapt 8% in a year, analysis of the latest HMRC data by R&D tax specialist
Catax has revealed.
The amount that firms in the sector claimed in tax reliefs rose 8% to £1.86 billion in 2019/20, according to tax credit statistics released last week by the Government.
The amount these companies are spending on R&D has reached £14.1 billion, while the number of claims made has risen at least 11.1%.
Catax CEO Mark Tighe said: “The manufacturing sector is one of the largest claimants for this sort of tax benefit. It has shown its capacity to continue to innovate despite this latest year overlapping with a period of significant disruption due to Covid-19 .
“Not only has R&D expenditure risen, but the number of companies claiming has also shot up, which is probably due to a combination of factors. Some firms will be engaging in this kind of work for the first time, possibly driven by environmental concerns as companies in polluting industries bid to become greener, while others will have only recently discovered they were eligible for these tax benefits, having perhaps missed out in previous years.”