YORK has been revealed as a hotspot for innovation.

Businesses in the city invest almost £50m on research and development, representing a spend of £238 per person.

This places it in the top 20 UK towns and cities with the highest R&D expenditure per capita, according to analysis of the latest official data by tax relief experts Catax.

Middlesbrough spends the least per capita, at £71 per person, followed by Blackpool, which recorded £72 per person.

Any business that invests in developing new products, processes or services can claim R&D tax incentives - but many fail to realise their work qualifies as R&D under HMRC’s rules. R&D doesn’t need to be successful to qualify.

The Government's R&D tax relief scheme encourages investment in innovation. Firms can choose to receive R&D tax relief as tax credits, which help to reduce a limited company’s corporation tax bill, or a cash reimbursement from HMRC3.

Mark Tighe, CEO of Catax, said: "Thousands of companies will face financial difficulty in the coming months as the coronavirus crisis bites. It’s a tragedy that many of these companies will ultimately go bust without realising they could have claimed significant sums under the R&D tax relief scheme.

“There needs to be more education among small businesses over what counts as R&D and how they can claim. A piece of software, a new innovative menu item in a restaurant or a simplified manufacturing process can all qualify.”

Among York's innovative businesses is Incremental Solutions which provides technology for smart transport systems and last year won a Queen's Award for Enterprise in recognition of its excellence in the field of innovation.