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With the current economic challenges making innovative businesses consider where the best place is to conduct their work, it is worth understanding how the UK stacks up compared to its international counterparts.
As part of the OECD, the UK’s expenditure on vital infrastructure is monitored closely and this can inform international companies looking to make the most of services available in a specific country.
Accountants looking to support clients with R&D benefit from knowing how the UK ranks among global peers, as this can inform the likelihood of changes to support in the future.
Is the UK a good place for R&D?
There have been reports recently of major companies in key industries leaving the UK, citing its weak commitment to R&D as a factor in the departure.
This saw the pharmaceutical industry in particular experience a notable shift as smaller companies have been left to innovate in the wake of major departures.
However, the OECD figures reveal a different idea of the UK’s position on R&D.
When taken as a percentage of its GDP, the UK ranks fourth in the OECD for R&D support.
In particular, the Government tax relief for R&D makes up the majority of the way that the UK funds R&D, with that alone being more substantial than the total investment from many countries in the OECD.
It is worth noting that the OECD figures relate to expenditure in 2024, but the recent release of HMRC’s 2025/26 Annual Report and Accounts indicates that R&D investment has increased since then.
How can innovative businesses make the most of the UK’s commitment to R&D?
The OECD figures should serve to reassure accountants who are hoping to help clients with R&D but may not be entirely convinced of the value of doing so.
That the tax reliefs available in the UK contribute so significantly to such a high level of R&D investment demonstrates the need to engage with R&D tax reliefs in a robust way.
Despite misconceptions that the UK may be struggling with R&D investment, the ongoing issue may be that many innovative companies are still unsure how to fully utilise the support available.
Working alongside an R&D tax consultant is the most effective way of maximising an R&D tax relief claim while ensuring it is fully compliant.
Our team are adept at helping accountants and innovative businesses to make the most of R&D tax relief claims by ensuring that all qualifying costs are included in the claim.
It might not seem important to cover all bases, but missed expenditure can quickly add up, harming the long-term viability of the business and blocking future innovation.
Similarly, being too liberal with the inclusion of costs risks invalidating the entire R&D tax relief claim and incurring penalties from HMRC.
To strike the balance, our expert team will work alongside you and your clients to sense-check every part of an R&D tax relief claim.
We will help your clients benefit from the generosity of the UK R&D tax relief scheme, ensuring that the UK remains a bastion of innovation for many years to come.
We can also support you and your clients in understanding how other sources of funding can interact with R&D tax relief claims to ensure that submissions are fully compliant.
For expert support in accessing the fourth best R&D investment system in the OECD, speak to our team today!
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.
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