UK R&D Tax Credit Statistics 2023-24

In 2023-24, UK businesses claimed a provisional GBP 7.6 billion in R&D tax relief, across 46,950 claims, the lowest claim volume on record for the scheme and a fourth consecutive year of decline. For the first time, the RDEC scheme (used mainly by larger companies) paid out more than the SME scheme. This page sets out what that means: who claimed, where, how much, and what it signals for first-time claimants looking at 2026. Figures are sourced from HMRC's Research and Development Tax Credits Statistics: September 2025 release. We are not a tax adviser; values shown are indicative.

Quick answer: In 2023-24, UK companies made 46,950 R&D tax credit claims (down 26% year-on-year), generating £7.6 billion of relief against £46.1 billion of qualifying expenditure. For the first time, RDEC relief exceeded SME scheme relief. The average claim rose by around a third as smaller, thinner claims fell away. Source: HMRC, Research and Development Tax Credits Statistics: September 2025.

How many R&D tax credit claims were made in 2023-24, and how much relief did HMRC pay?

The UK's R&D Tax Credits are one of the largest innovation-incentive programmes in Europe by cash outlay. According to HMRC's Research and Development Tax Credits Statistics: September 2025 release, published 30 September 2025, the 2023-24 picture is as follows.

Total claims: 46,950 (provisional), down 26 percent on 2022-23. Total relief: GBP 7.6 billion (provisional), down 2 percent on 2022-23. Qualifying R&D expenditure: GBP 46.1 billion, down 1 percent on 2022-23. Average claim: around GBP 162,000, calculated from the totals above; HMRC's own commentary describes this as roughly a 33 percent increase on the prior year's average. Source: HMRC, Research and Development Tax Credits Statistics: September 2025.

Two things stand out. First, claim volumes fell sharply for a fourth consecutive year, driven almost entirely by the SME scheme. Second, total relief barely moved despite that fall, which means the average claim rose materially. The short explanation: the compliance reforms removed a large number of smaller, weaker claims, and larger, more substantive claims now make up a bigger share of the total.

The five-year view

2023-24 is the fourth consecutive year of falling claim volume. HMRC attributes the trend to three overlapping reforms: the reduced SME payable-credit rate from April 2023, the mandatory Additional Information Form (AIF) from August 2023, and a sustained compliance crackdown that has both filtered out weaker claims and deterred speculative ones before they are filed. Total relief value has held far steadier than claim volume across the same period, which is consistent with smaller and thinner claims disappearing while larger, well-documented claims continue.

First-time claimants reading this data in 2026 should not anchor on the higher claim-volume years of 2020 to 2022. The bar for a well-evidenced claim, in both narrative quality and cost discipline, is higher than it was three or four years ago, and HMRC's own data shows that gap widening rather than closing.

How did SME scheme and RDEC claims compare in 2023-24?

2023-24 is the last full data year reported under the pre-merger structure: the SME scheme and the Research and Development Expenditure Credit (RDEC) scheme, before the single merged scheme took effect for accounting periods beginning on or after 1 April 2024. For 2023-24, HMRC reports:

SME scheme: GBP 3.15 billion relief (down 29 percent), across 36,885 claims — 16,020 deduction-only, 20,865 with a payable-credit element, and 3,990 claims made under the SME R&D-intensive category. RDEC scheme: GBP 4.41 billion relief (up 36 percent), across 10,065 claims — 3,335 from large companies (down 12 percent, GBP 3.6 billion relief) and 6,730 from SMEs claiming under RDEC (down 2 percent, GBP 795 million relief).

For the first time since the two schemes existed side by side, RDEC relief exceeded SME scheme relief in a single data year. That crossover reflects both the SME scheme's steeper volume decline and RDEC's comparative resilience among larger, better-resourced claimants. Source: HMRC, Research and Development Tax Credits Statistics: September 2025.

First-time applicants are also falling

HMRC's first-time applicant data (latest available for 2022-23, the most recent year with a settled count) shows 7,230 first-time SME scheme applicants (down 45 percent) and 2,000 first-time RDEC applicants (down 21 percent) — the fourth consecutive annual decline in new claimants. Fewer companies are entering the scheme for the first time even as existing large claimants continue. This is one reason the market for well-run specialist advisers, rather than volume claim-mills, has consolidated.

Which sectors claimed the most UK R&D tax relief in 2023-24?

HMRC breaks R&D claim data down by Standard Industrial Classification (SIC) code. The concentration is stable year on year: three sectors account for roughly seven out of every ten claims and just over two-thirds of relief value.

Information and Communication: 26 percent of claims, 21 percent of relief value. Manufacturing: 26 percent of claims, 26 percent of relief value. Professional, Scientific and Technical Activities: 19 percent of claims, 24 percent of relief value. Combined, these three sectors account for 72 percent of all claims and 71 percent of relief value in 2023-24. Source: HMRC, Research and Development Tax Credits Statistics: September 2025, sector breakdown.

Manufacturing's relief share matches its claim share almost exactly, consistent with claim sizes near the overall average. Professional, Scientific and Technical Activities claims a smaller share of volume than relief, meaning its typical claim runs above the overall average, plausibly reflecting the capital and staff intensity of engineering, scientific and specialist-consultancy R&D. Information and Communication has the largest claim share by volume but a smaller relief share, consistent with a high number of smaller software-sector claims.

The remaining sectors, Wholesale and Retail, Construction, Agriculture, Transport, Financial Services, Arts and Recreation and others, share the remaining 28 percent of claims between them. First-time claimants in these sectors most often ask whether they qualify at all. Some do: construction claims typically relate to novel structural or materials problems, agriculture claims to crop, soil or livestock-science problems, and financial-services claims increasingly to fintech and regtech software development. The framing of the scientific or technological uncertainty, not the SIC code, is the deciding factor.

4. By region

HMRC's regional data uses the registered office of the claimant company, which means it over-represents London and the South East relative to where the underlying R&D activity actually happens. With that caveat, the 2023-24 picture:

London: 24 percent of claims, 31 percent of relief value — calculated from HMRC's published shares, that is roughly 11,300 claims and GBP 2.4 billion. South East: 15 percent of claims, 20 percent of relief value — roughly 7,000 claims and GBP 1.5 billion. East of England: 10 percent of claims, 13 percent of relief value — roughly 4,700 claims and GBP 1.0 billion. Source: HMRC, Research and Development Tax Credits Statistics: September 2025, regional breakdown; absolute figures are Uplift Tax calculations from HMRC's published percentages and totals, not HMRC-published counts.

London and the South East together account for around 39 percent of claims and 51 percent of relief value, a larger share of relief than of claims, consistent with larger average claim sizes among London and South East claimants. Two known biases apply to all regional R&D data: registered-office bias (a group headquartered in London with R&D activity in Leeds or Cardiff appears under London), and submission-date lag (regional tables reflect claims received in the statistical year, which lags the underlying activity year by up to two years). Companies across all four UK nations file under the same HMRC rules; there is no separate devolved regime for R&D Tax Credits.

5. Where the value sits: cost-band concentration

HMRC also publishes a cost-band breakdown showing how claim value concentrates. In 2023-24, claims of up to GBP 50,000 accounted for 61 percent of all claims by volume, the large majority of which sit in the SME scheme. At the other end, claims of GBP 1 million or more accounted for 54 percent of total relief value, up 11 percentage points on the prior year. Source: HMRC, Research and Development Tax Credits Statistics: September 2025, cost-band tables.

Read together with the sector and scheme data above, this confirms the same underlying story: a large population of smaller claims by volume, with value increasingly concentrated in a smaller number of large claims. For a first-time SME claimant, this does not mean a small claim is not worth preparing. It means a small claim needs to be prepared to the same evidential standard as a large one, because HMRC's scrutiny does not scale down with claim size.

6. Compliance landscape: the error-and-fraud rate is falling

The compliance environment for R&D claims tightened sharply from 2022 onward, and HMRC's own figures now show that tightening working. HMRC's illustrative estimate of the level of error and fraud in R&D claims for 2023-24 is 7.8 percent overall (down from 17.6 percent in 2021-22), and 14.6 percent within the SME scheme specifically (down from 25.8 percent in 2021-22). Source: HMRC, Approach to Research and Development Tax Reliefs 2023 to 2024, published 30 October 2024.

The proportion of claims HMRC checks has also risen, from 10 percent in 2022-23 to 17 percent in 2023-24, and HMRC's dedicated R&D compliance headcount has grown from around 100 people in 2020-21 to over 500. The mandatory Additional Information Form, in force since 8 August 2023, is the single reform HMRC and independent commentators most consistently credit for the improvement, because it forces a structured project narrative and cost breakdown at the point of filing rather than only on enquiry.

The most common HMRC enquiry triggers, based on published HMRC guidance and specialist adviser reports, remain: thin technical narratives that do not identify a clear scientific or technological uncertainty; generic or boilerplate Additional Information Forms; software claims that restate the product rather than the underlying technical advance; large round-number subcontractor costs, especially to connected parties; sales, marketing or general admin costs included as qualifying expenditure; and full-year apportionment of a senior or generalist employee's time as 100 percent R&D. An enquiry does not mean a rejected claim; a well-prepared claim defended by a specialist adviser frequently stands. What it reliably means is more time, more documentation, and more management attention for the client.

7. What the 2023-24 data does not yet show

It is worth being precise about what this release does and does not cover, because the two are often conflated in commentary. The merged R&D expenditure credit and Enhanced R&D Intensive Support (ERIS) apply to accounting periods beginning on or after 1 April 2024. HMRC states explicitly that the September 2025 release does not include the impact of the merged scheme or ERIS; the 2023-24 data reported above reflects claims under the pre-merger SME and RDEC rules only.

The first HMRC statistics release to include merged-scheme and ERIS data is expected in autumn 2026, covering the 2024-25 data year. That release will be the first hard evidence of how the merged scheme's single 20 percent above-the-line credit, and the 30 percent R&D-intensity threshold for ERIS, have actually played out at claimant level, rather than the modelled projections available today. Uplift Tax will publish same-day analysis of that release on this page when it lands; see the note under "Cite this page" above. For background on the rules themselves, see the merged scheme explained.

8. Why claim volumes have fallen for four straight years

The 26 percent decline in claim volume between the 2022-23 and 2023-24 data years, on top of three prior years of decline, has several contributing causes. Three stand out.

Rate reduction for SMEs from April 2023. The loss-making SME payable credit was cut materially for non-R&D-intensive companies from April 2023, with the SME R&D-intensive category (the precursor to ERIS) introduced to protect the most research-intensive loss-makers. For marginal claims prepared on a fee-for-outcome basis, the rate change made preparation uneconomic for a number of would-be claimants.

Mandatory Additional Information Form from August 2023. The AIF requires a structured project description, cost breakdown, a named responsible officer, and adviser details. For claims that had previously been prepared thinly, the AIF either required meaningful additional work or exposed weaknesses that would not survive HMRC scrutiny. A number of smaller, volume-focused advisers exited the market in 2023 and 2024.

Compliance crackdown. HMRC's expanded compliance headcount, the rising checked-claim rate, and the falling but still-material error-and-fraud estimates changed the risk-reward calculation for speculative claims. Some claimants who would historically have filed chose not to.

The effect is concentrated at the lower end of the claim-size distribution: the 26 percent fall in claim count is far larger than the 2 percent fall in total relief, because the claims that disappeared were disproportionately smaller and thinner ones. Source: HMRC, Research and Development Tax Credits Statistics: September 2025, and HMRC's Approach to Research and Development Tax Reliefs 2023 to 2024.

9. What this means for first-time claimants in 2026

A first-time R&D claimant looking at the 2026 environment should take away four things from the 2023-24 data.

One. The scheme is still large and still active. GBP 7.6 billion of relief in a single provisional year is meaningful fiscal support, and HMRC's own compliance investment (500+ dedicated staff, up from around 100) signals a policy intention to keep the scheme running rather than wind it down. First-time claimants are not arriving at a closing door.

Two. The bar is real, and it is falling error-and-fraud that proves it, not just anecdote. HMRC's own illustrative estimate has more than halved since 2021-22 (17.6 percent to 7.8 percent overall). A first-time claim in 2026 needs the same standard of evidence that has driven that fall: a clear technical narrative, a properly completed AIF, and a defensible cost schedule.

Three. Sector matters, but is not destiny. Information and Communication, Manufacturing, and Professional, Scientific and Technical sectors dominate by volume and value, but the remaining 28 percent of claims come from every other sector of the economy. A less-represented sector needs a clearer framing of the scientific or technological uncertainty, not a different scheme.

Four. 2024-25 is the first merged-scheme year, and nobody outside HMRC has seen the aggregate results yet. Companies with accounting periods beginning on or after 1 April 2024 are claiming under new rules with no published outturn data to benchmark against. An independent eligibility check before committing to a preparer matters more, not less, in this transition window.

For first-time claimants, the single most useful step is an independent eligibility view before committing to a preparer. Our process page describes how that works. We are not a tax adviser; any values shown on this page are indicative only.

What to ask before engaging a preparer

From the 2023-24 data, five questions are worth asking any adviser before engaging them. Does the firm hold CTA or ATT qualifications at firm level, and is it on the HMRC agent register? How does the firm structure AIF drafting: interview-led, client-led, or hybrid? What is the firm's own enquiry rate over the last two years, and how are enquiries typically resolved? Is the fee no-win-no-fee and disclosed in writing before engagement? Will the fee cover HMRC enquiry support, or is that a separate line?

These five questions filter out most issues at the front door. A firm that cannot answer them directly is not the right firm for a first-time claim in 2026. A firm that answers them clearly is worth continuing the conversation with.

10. Methodology and sources

Headline, scheme, sector, regional and cost-band figures on this page are drawn from HMRC's Research and Development Tax Credits Statistics: September 2025 release (gov.uk, published 30 September 2025), which covers the 2023-24 data year on a provisional basis. Error-and-fraud and compliance-headcount figures are drawn from HMRC's Approach to Research and Development Tax Reliefs 2023 to 2024 (gov.uk, published 30 October 2024). Where HMRC publishes a percentage share rather than an absolute count (regional data, most of the sector data), we say so and, where we have calculated an approximate absolute figure from that percentage and the published total, we label it as calculated rather than HMRC-published. Where a number cannot be traced to one of these two named HMRC publications, it is not on this page.

Key caveats. 2023-24 figures are provisional in the September 2025 release and will very likely be revised in the autumn 2026 release; HMRC's own historical pattern is that revisions to claim count and relief value are usually upward. The 2023-24 data predates the merged R&D scheme and ERIS entirely; see section 7 above. Company-size data in the pre-merger structure is reported by scheme (SME vs RDEC) rather than by employee headcount band; we have not attempted to translate HMRC's scheme-level data into employee-band estimates, because HMRC does not publish that cross-tabulation in this release.

Primary sources: HMRC, Research and Development Tax Credits Statistics: September 2025 (gov.uk). HMRC, Approach to Research and Development Tax Reliefs 2023 to 2024 (gov.uk, 30 October 2024). HM Treasury, Spring Statement and Autumn Budget documents 2023 to 2025 (gov.uk).

This page was last checked against HMRC's published statistics on 2 July 2026. Figures are provisional and subject to HMRC revision; corrections are made on a rolling basis, see our editorial standards.

Use this data

These statistics are drawn from HMRC's R&D Tax Credit Statistics: September 2025 release and HMRC's Approach to Research and Development Tax Reliefs 2023 to 2024. You may quote figures from this page in articles, presentations, internal reports, academic work or social media with attribution to Uplift Tax (uplifttax.com) and the underlying HMRC source named above. Please link back to this page where practical, so readers can check the methodology.

If you have questions on the underlying figures, or would like to discuss the data with someone before publishing, please contact us via the contact page.

Frequently Asked Questions

How many R&D tax credit claims did UK companies make in 2023-24?

According to HMRC's Research and Development Tax Credits Statistics: September 2025 release, UK businesses filed 46,950 R&D claims for the 2023-24 tax year (provisional), down 26 percent on the prior year and the fourth consecutive year of decline.

How much R&D relief did HMRC pay in 2023-24?

HMRC's provisional estimate is GBP 7.6 billion in R&D relief across the 46,950 claims reported for 2023-24, an average of around GBP 162,000 per claim, roughly a third higher than the prior year's average. These are provisional figures subject to HMRC revision.

Why did R&D claim volumes fall again in 2023-24?

Three overlapping factors: the reduced SME payable-credit rate from April 2023, the mandatory Additional Information Form from August 2023, and a sustained HMRC compliance crackdown that has both filtered out weaker claims at source and deterred speculative claims from being filed at all.

Which sectors claim the most R&D relief?

Information and Communication (software and technology), Manufacturing, and Professional, Scientific and Technical Activities together account for 72 percent of UK R&D claims by volume and 71 percent by relief value in 2023-24.

Related

• The Merged RDEC Scheme Explained
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• Our Methodology
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