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UK R&D Tax Relief Statistics 2025: Why SME Claims Halved and Large Company Claims Grew
The latest official HMRC statistics for UK R&D tax relief, covering claims for the 2023–24 tax year (released September 2025), show a decisive shift in the scheme's landscape, primarily driven by recent reforms and stricter compliance measures.
Key Summary Points
Total Relief and Claim Volume: While the total value of relief claimed only fell by a modest 2% to £7.6 billion, the total number of claims collapsed by 26% year-on-year to 46,950. This is the lowest claim volume in nearly a decade, and less than half the peak seen two years prior.
Shift to Large Companies (RDEC): For the first time, the majority of the support pot went to large companies under the Research and Development Expenditure Credit (RDEC) scheme, which grew in value by 36% to £4.41 billion.
SME Scheme Collapse: Small and Medium-sized Enterprises (SMEs) have borne the brunt of the change.
SME claims fell 31% year-on-year, marking a 52% collapse in claim numbers over three years.
The total value of SME relief fell by 29% to £3.15 billion.
Causes: This shift is directly attributed to the April 2023 reforms:
The SME scheme became less generous (additional deduction cut from 130% to 86%, payable credit reduced from 14.5% to 10%).
The RDEC rate was increased from 13% to 20%.
Increased compliance scrutiny is also a major factor, with 17% of all claims undergoing HMRC enquiries in 2023–24.
Impact on Start-ups and Small Claims: The steepest falls were seen in claims valued under £15,000, and the proportion of first-time claimants among new companies fell to a historic low of 0.42%. This raises concerns that the incentive is failing to stimulate innovation among emerging businesses.
Future Outlook: The separate SME and RDEC schemes are set to be replaced by a single merged scheme from April 2024, which will include a special uplift for R&D-intensive SMEs, in an effort to restore some balance.
Conclusion for Businesses
The statistics reveal a scheme that is now "cleaner and more compliant, but also smaller and increasingly tilted towards large companies". For SMEs still engaging in genuine innovation, the article stresses that opportunities remain, but claims must be robust, well-evidenced, and professionally supported due to the highest-ever level of HMRC scrutiny.
This Summary was taken from RandDTax Blog.
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