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Businesses in Manchester most innovative in the UK

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Mark Tighe

Businesses in Manchester are leading the way in British innovation, with four times as many Research & Development (R&D) tax relief claims as its closest rival, specialist tax relief firm Catax revealed today.

The northern powerhouse city made 1,140 claims for R&D tax relief in just 12 months, worth £75m, latest figures show.

It was four times the 290 claims made by Edinburgh businesses in second place.

Businesses which spend time and money developing a new product, business process or service could potentially claim tax relief for R&D. In Catax’s experience, the average claim is worth £44,000.

Despite these figures, there is a common misconception that the R&D needs to be successful in order to qualify for this type of relief. However, an incredible 72% of senior business leaders don’t realise this is not the case and that, as long as time and money has been spent, the R&D could qualify.

Meanwhile, there also continues to be a lack of awareness around what qualifies for R&D tax relief in the first place, with many firms wrongly believing they wouldn’t be entitled to claim. Previous research suggests nearly half of businesses (44%) believe that R&D relief is restricted to companies in the science and technology sectors.

Catax CEO, Mark Tighe, commented: “Whilst it is true that more businesses are claiming the R&D tax relief that is rightfully theirs, far too many SMEs still don’t realise that they qualify.

“There needs to be more education among small businesses over what actually counts as R&D. Most don’t realise it’s not just a new scientific formula or a jet engine but a piece of software, an manufacturing process or even a new innovative restaurant dish. 

“The typical £44,000 claim is a significant amount of money and firms need to be asking themselves whether they can afford not to check if they could benefit.’’