The North-South divide has frequently dominated political discourse in the UK.
More recently it has given birth to the levelling up policies currently claiming plenty of column inches in the media.
But it’s wrong to assume that the South always has the best of it. Peer into the latest claims figures for R&D tax relief from HMRC and another picture emerges.
By levelling up this playing field and taking into account the number of businesses in each of the UK’s regions, it is the North that comes out on top, followed closely by the West Midlands and North West.
The South East, South West and East of England trail right down at the bottom of the table, with R&D claims well behind the national average of 14.4 per 1,000 businesses.
These southern regions may be home to major research centres and universities but are making far fewer claims, relatively speaking. The East of England and South East make just over 13 claims per 1,000 businesses, compared to the North East’s 16.9. The South West fares even worse — making only 11.5 claims per 1,000 firms.
Regions making the most R&D claims per 1,000 businesses
|Total R&D Claims||Total Businesses||Claims per 1,000 businesses|
|Yorkshire and the Humber||6,405||422,435||15.2|
|East of England||8,085||598,250||13.5|
Source: HMRC R&D tax credits and BEIS business population estimates
According to HMRC’s latest R&D tax credit figures, overall claims increased 16% from the previous year — a sign of the progress that has been made in raising awareness of the tax break but hopefully also evidence that there’s been a boom in research and development in the UK.
There is always a lag with these figures, so they only cover up to March 2020, and we’ll need to wait another 12 months to see which regions were impacted the most by the pandemic and whether this momentum can be sustained.
Ultimately, we need to see all UK regions building on this platform, as increased innovation can only be a positive thing for the UK at large, wherever the work is taking place.