HMRCs R&D tax credit statistics 2025: what the numbers reveal about UK innovation

The September 2025 release reveals a picture of shifting claimant behaviour, new compliance pressures, and the early impact of policy reforms. For SMEs, the message is clear: the R&D tax landscape is evolving, and it’s more important than ever to understand where you stand.

Headline figures from HMRC’s 2023–24 statistics

According to HMRC’s latest R&D tax credit statistics, here are the key takeaways for the 2023–24 tax year:

• £7.6 billion of total R&D tax relief was claimed across all schemes – a 2% fall compared with the previous year‍
• £46.1 billion of qualifying R&D expenditure was reported, down 1% year-on-year‍
• SME scheme claims dropped significantly: £3.15 billion claimed, down 29%‍
• RDEC claims increased to £4.41 billion, a 36% rise in value despite a small fall in claim volumes
• Around 46,950 claims were made in total, a 26% fall compared with the prior year
• Smaller claims saw the sharpest drop, while average claim values rose by around a third
• Regionally, London and the South East continued to dominate, accounting for over 40% of claims
• By sector, Information & Communication, Manufacturing, and Professional, Scientific & Technical made up 72% of claims

Why the SME scheme has taken a hit

The fall in SME claims is not a coincidence. Several policy and compliance changes introduced in April 2023 altered the financial return and increased the complexity of making smaller claims:

1. Less generous SME rates – the enhancement rate reduced from 130% to 86%, while the payable credit rate for loss-making SMEs dropped from 14.5% to 10%.‍

2. More generous RDEC rates – at the same time, the RDEC credit rate increased from 13% to 20%, making it comparatively more attractive.

3. Special support for R&D-intensive SMEs – businesses spending at least 40% of their total costs on qualifying R&D still benefit from the higher 14.5% rate, but this threshold excludes many firms.

4. Administrative hurdles – the introduction of the Additional Information Form in August 2023 increased the burden of compliance, particularly deterring smaller claims.

5. Corporation tax rate increase – From 1 April 2023, the main rate of corporation tax rose from 19% to 25%. That shift means the value of a deduction is greater for SME scheme claims, but also affects how much RDEC claims are netted.

For many SMEs, this combination has shifted the calculation of whether a claim is “worth it”. Those with modest R&D spend may now find the benefit outweighed by the cost and effort of preparing a robust submission.

What this means for businesses

While the statistics show fewer businesses claiming, there are still significant opportunities for those that approach the process strategically:

Focus on R&D intensity

If a large share of your expenditure is on qualifying R&D, you may qualify for the higher credit rate designed to protect innovative firms.

Evaluate scheme choice

In some circumstances, SMEs may benefit more from claiming under RDEC (e.g. where R&D is subsidised or subcontracted). The statistics underline the growing relevance of RDEC for smaller companies.

Plan for compliance from day one

With HMRC now placing far greater emphasis on compliance, businesses should expect claims to be scrutinised more closely. Detailed technical and financial evidence has always been required, but the bar for demonstrating it is now higher — and the consequences of falling short are more visible.

Think about scale‍

Larger, better-prepared claims are faring better. That may mean consolidating projects, investing in more detailed project tracking, or collaborating strategically.

Benchmark against your sector‍

If you’re in manufacturing, professional services or technology, you’re among the heaviest claimants — but the data also shows what’s possible in terms of claim size and frequency.

Looking ahead: what’s changing next?

The September 2025 data reflects only the first year of reforms. Further changes are already in motion:

• From April 2024, a single merged R&D Expenditure Credit scheme will apply across companies of all sizes, with transitional support for R&D-intensive SMEs.
• Claimants should expect compliance requirements to remain high, with HMRC scrutinising claims more closely and demanding stronger evidence.

The headline? Relief is still available, but the landscape favours those businesses that are serious about innovation and disciplined about how they evidence it.

Final thoughts: navigating the evolving R&D landscape

The latest HMRC R&D tax credit statistics confirm that the scheme is entering a new phase. Relief is still substantial, £7.6 billion in the past year, but fewer companies are claiming, and the balance has shifted toward larger, better-documented projects.

For businesses invest in R&D, the implication is clear: success under the new regime means taking R&D tax seriously, embedding stronger record-keeping, and ensuring claims are strategically valuable. Those who adapt early will continue to unlock meaningful funding for innovation, even as the rules tighten.

FAQs on HMRC R&D tax credit statistics report 2025

Q: How many companies claimed R&D tax relief in the latest statistics?

A: Around 46,950 companies claimed for 2023–24, down 26% on the previous year.

Q: Why are SME claims falling?

A: Lower credit rates, tougher compliance requirements, and the administrative burden of new reporting forms have reduced the number of smaller claims.

Q: Are R&D tax credits still worth it for SMEs?

A: Yes, especially for companies with significant R&D activity or those meeting the R&D-intensive threshold. But claims must now be more carefully evaluated and substantiated.

Q: Which sectors benefit most?

A: Information & Communication, Manufacturing, and Professional, Scientific & Technical dominate, together accounting for over 70% of claims and relief value.

Q: What’s next for the scheme?

A: A merged R&D Expenditure Credit scheme took effect from April 2024, designed to simplify the landscape while maintaining extra support for R&D-intensive SMEs.