HMRC figures show a sharp fall in the number of research and development (R&D) tax relief claims, but the overall value of payouts has barely changed.
In 2023/24, businesses claimed £7.55 billion in R&D relief, just 2% down on the previous year’s £7.69bn, despite a 26% drop in claims to 46,950. Total company R&D expenditure also slipped slightly to £46.1bn.
The decline follows more rigid HMRC rules to curb abuse, including a mandatory additional information form. Smaller businesses have been hit hardest: SME claims fell by 31%, from £4.44bn to £3.15bn. By contrast, large companies benefited from the more generous R&D expenditure credit (RDEC) scheme, which jumped 36% to £4.41bn.
HMRC estimates fraud and error in 2023/24 claims at £867 million, around 10% of the total, although significantly lower than in previous years.
While the volume of claims fell, the average claim value rose by 33%, with fewer small claims (under £15,000) and more high-value claims (above £250,000). This shift and a more generous RDEC scheme explain why total relief levels remained unchanged.
The figures predate the 2024 reforms merging the SME and RDEC schemes. Sector patterns were stable, with information and communication, manufacturing, and professional, scientific and technical businesses making up 72% of claims. London and the South East continued to dominate registrations.
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