Does your client operate in an R&D hotspot?

No innovative business is an island and the circumstances in which research is conducted can have a significant impact on whether an R&D tax relief claim is made.

In light of the latest R&D tax credit statistics, it is more apparent that research is pooling in specific parts of the country.

For accountants looking to help clients with R&D, knowing where these hotspots are and how to help clients both within and without them is vital.

Where does most of the R&D in the UK take place?

It may come as little surprise to discover that the largest single location to conduct R&D is London.

The capital city is home to 24 per cent of R&D tax relief claims and these amount to 30 per cent of the total relief claimed across the UK.

The rest of the South East of England is a close second in terms of its R&D output, generating 15 per cent of claims and making up 19 per cent of the total value.

Continuing along the East of England, 10 per cent of claims come from that region and they account for 14 per cent of the overall value.

The sharp accountants among you will have noticed that those three locations are responsible for 63 per cent of the total value of UK R&D tax relief claims.

Any innovative business based in these regions should be seeking to utilise the R&D infrastructure and further expand the scope of their research to continue making the most of the R&D tax reliefs available.

For the rest of the UK, this information highlights how much more needs to be done to engage with R&D tax reliefs.

While it is possible that more R&D does happen in three regions than the entire rest of the UK combined, there is a clear indication that innovators are slipping through the cracks when they conduct work in less connected areas.

How do accountants manage the regionality of R&D?

We recently discussed the ways in which location can be an important factor for R&D and these statistics reveal more about the matter.

Innovation attracts innovation, as when research is conducted, the investment that research receives may increase the R&D capabilities of the surrounding area.

While this is good news for the three regions that are R&D powerhouses, there is concern for innovators based elsewhere.

The build-it-and-they-will-come approach could see innovators struggling to break ground in areas that do not currently have the reputation for R&D, which in turn makes it more difficult to get those areas the necessary reputation.

While the statistics show that engagement with R&D tax reliefs varies significantly across the UK, businesses outside of the traditional hotspots should endeavour to make the most of the scheme to fuel advances.

While other grants and funds may be tied to specific regions or linked to infrastructure, R&D tax reliefs can be accessed by any innovative business in any part of the UK.

Accountants who work with innovators in the least R&D engaged regions, such as Wales, Northern Ireland and the North East of England, should make sure to maximise the effectiveness of R&D tax reliefs by engaging with an expert R&D tax consultant.

Based in the East Midlands, we are disheartened to see our own region not in the top positions, but we do work with clients across the UK.

Whether you are working in an R&D hotspot or wasteland, our expert team can support you in making the most of R&D tax reliefs and defending valid claims from enquiry.

Our professionals have deep knowledge across a range of sectors and are able to capture the full spectrum of qualifying expenditure, providing greater value and paving the way for future innovation.

For expert R&D tax relief support across the UK, get in touch with our team.

Adam Bointon

Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 years’ experience, he works closely with businesses to identify qualifying R&D activities and prepare clear, compliant claims. He combines technical expertise with a strong understanding of economics and finance to support successful outcomes. Adam also contributes to industry webinars and CPD sessions, sharing insights on R&D tax relief and HMRC requirements.