Latest HMRC Statistics Indicate a Marked Decrease in SME R&D Tax Relief Claims
HMRC has recently published the latest statistics on Research and Development (R&D) tax relief claims for the 2023–24 tax year, providing the first full picture of how recent reforms have affected businesses.
The provisional data shows that the total amount of R&D tax relief claimed was £7.6 billion, a slight decrease of 2 per cent compared with the previous year. This support corresponds to £46.1 billion of qualifying R&D expenditure, which was down by 1 per cent.
For the first time, the figures reflect a range of changes introduced as part of the reform of R&D tax reliefs. These include new relief rates for both the SME and RDEC schemes, the introduction of the SME intensive rate, and the requirement for all claims to be supported by an Additional Information Form. Together, these measures were designed to improve compliance and reduce error, but they have also had a marked effect on the volume and value of claims.
The data shows that claims made through the SME scheme fell significantly. The amount of support claimed was £3.15 billion, a reduction of 29 per cent compared with the previous year. In contrast, the RDEC scheme grew strongly, with relief claimed rising by 36 per cent to £4.41 billion. This shift highlights the growing role of RDEC in the overall landscape of R&D incentives.
Across both schemes, the number of claims submitted fell to 46,950, a drop of 26 per cent. The decline was most pronounced among SMEs, where claim volumes were down by 31 per cent, while RDEC claims fell by 5 per cent. The reduction was most noticeable among smaller claims, particularly those worth up to £15,000, while larger claims above £250,000 proved more resilient. As a result, the average claim value increased by 33 per cent compared with the previous year.
In terms of geography, the concentration of claims remains consistent with previous years. Companies with registered offices in London and the South East accounted for the largest share, representing 24 per cent and 15 per cent of total claims respectively, and a combined 51 per cent of the total value claimed. It is worth noting, however, that the registered office location is not always where the underlying R&D activity takes place
Looking at the sector breakdown, the Information and Communication, Manufacturing, and Professional, Scientific and Technical industries continued to dominate. Together, they accounted for 72 per cent of claims and 71 per cent of the total amount of relief received.
These statistics provide important insight into how the R&D tax relief landscape is evolving. They reflect both the impact of policy changes and the ongoing importance of the incentive in supporting innovation across the UK economy.
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