The expenditure on innovation by food and drink manufacturers in the UK increased by 13%, to £800 million (€925.8 million), in 2021/22, according to a study based on government data by global tax service and software provider Ryan.
Companies spent £800 million (€925.8 million) on research and development in the food-and-drink sector in 2021/22 – up by 12.7%, from £710 million (€821.7 million), in 2020/21.
Despite this rise in expenditure, the number of research-and-development tax relief claims made by the sector fell by 1.4% – from 2,095 to 2,065 – the data showed.
In total, claims of £120 million (€138.9 million) in research-and-development tax relief were made for food-and-drink manufacturing, with an average claim value of £58,111.
‘Grappling With Rising Prices’
Nigel Holmes, director of research and development at Ryan, said, “Food and drink manufacturers may be grappling with rising prices, but they continue to be incredibly innovative.
“The sector is taking great strides to develop new technologies to produce innovative and novel products to meet market demands and improve sustainability in the industry.”
Growth in spending by the food-and-drink sector surpassed industry-wide figures in the UK, which registered an increase of 8%, to £44.1 billion (€51 billion), in 2021/22.
The study reported that the number of first-time claimants fell for the second year running.
Holmes added, “While it is great to see year-on-year increases in innovation spending, it is vital for the UK economy that this does not go into reverse gear.
“It is therefore concerning to see that the number of overall claimants for R&D tax relief has fallen for the second year running. This suggests that some companies may be nervous about claiming as a result of HMRC’s recent crackdown on fraud and error.”