The figures show that UK businesses claimed a record £7.4bn in R&D tax relief last year which is up 19% from £6.3bn the previous year with manufacturing and IT claiming the most R&D tax relief.

At the same time expenditure on R&D was up substantially with a 15% growth, up from £41bn the previous year.

The R&D tax credit scheme incentivises businesses to undertake R&D by allowing them to offset costs against their corporation tax bill. SMEs accounted for £4.4bn of R&D tax credit claims in 2019-20, up from £3.5bn the year before.

Manufacturing was the sector that invested the most, spending £14.1bn in 2019-20, up 8% from £13.1bn in 2018-19. Tech (information and communication) sat in second place spending £7.7bn in 2019-20, which was up 26% from £6.2bn in 2018-19.

W