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Transport businesses claimed £55m in research and development (R&D) tax relief in 2020/21, according to HMRC’s latest R&D tax credit statistics.

However tax relief specialist Access2Funding, part of the Ryan company, is warning that transport businesses are underclaiming on investments such as automated warehousing and IT investments.

According to its research, transport and storage businesses accounted for just 1% of the total number of UK claims, with the average transport R&D claim worth £58,000, compared to £70,000 in 2019/20.

The study found that despite the amount of business expenditure on R&D dropping 31% from £455m to £315m, a total of 950 claims were submitted, representing a modest 2% increase from the previous year, and totalling £55m.

Access2Funding believes this will rise as the 2020/21 claims window remains open for claims until March 2023.

The majority of claims were made by SMEs (800), and the average transport claim under the SME scheme increased from £45,751 to £50,000.

Other sectors are claiming significantly more. Taking top spot with the number of claims was the information and communications sector, at 22%, closely followed by manufacturing at 21%, and professional, scientific and technical at 19%.

A total of 89,300 claims throughout all industries were made overall up until 31 March 2021, with 78,825 claims from SMEs.

Nigel Holmes, director of tax at Ryan, said: “Whilst the Covid-19 pandemic has influenced the latest statistics, they do however show a modest increase in the number of claims made by the transport industry, which is encouraging, despite R&D spend dropping by almost a third.

“Transport SMEs have particularly weathered the storm, with 5% more SMEs claiming in 20/21 than 19/20 and a total claim value increase of 14% – reflecting the resilience of the industry and its ability to adapt and overcome.

“It is, however, clear that this industry is still underclaiming, which is disappointing to see considering the breadth of innovation the transport sectors undertake, from efficiency improvements to automated transport and warehousing solutions.

“Within these sectors, if a company solves technical problems, it could be eligible for R&D tax relief for this innovative work, so I hope more businesses in the industry are encouraged to check their eligibility.”

The average claim value across the UK is sitting at approximately £74,000, or £54,000 for SMEs. There has been a 7% increase in the provisional estimated amount of claims made compared to last year, from 85,900 to 89,300, driven by a 7% rise in the number of R&D claims made by SMEs.