North West business spending on the most valuable forms of innovation has risen by the second-highest amount out of all regions of the UK, according to analysis of new Government statistics.
Expenditure on high-reward research and development (R&D) grew in the North West by 17% from £2.6 billion in 2020/21 to £3 billion in 2021/22.
The data, released last week, is captured by HMRC and is based on claims made for R&D tax relief, which reward businesses for qualifying activity.
Alongside the increase in spending, the number of tax relief claims for R&D projects made by North West businesses rose by 3% to 9,220 claims. In total, North West businesses claimed £570 million in R&D tax relief, with an average claim value of £61,822.
Overall, UK-wide innovation spending that qualifies for tax relief rose 8% to £44.1bn in 2021/22. However, the number of first-time claimants has fallen for the second year running.
R&D projects carried out by UK companies introduce new products and services to the marketplace, which play a critical role in economic growth as they attract investment, boost exports and lead to the creation of more skilled jobs.
R&D tax relief was introduced in 2000 to encourage and reward innovation and results in either a reduction in a limited company’s corporation tax bill or a cash lump sum for companies seeking to resolve a scientific or technological uncertainty.