HMRC figures show increase in R&D tax relief support
Total R&D tax relief support increased by 5% year-on-year to £8.2bn in 2024-25, while qualifying R&D expenditure rose 7% to £51bn, according to the latest figures published today by HMRC.
The statistics are the first to reflect the government’s new merged R&D Expenditure Credit (Merged RDEC) and Enhanced R&D Intensive Support (ERIS) regimes, which replaced the previous SME and RDEC schemes for accounting periods beginning on or after 1 April 2024.
HMRC estimates that total R&D tax relief claimed increased from £7.8bn in 2023-24 to £8.2bn in 2024-25, while qualifying R&D expenditure rose from £47.8bn to £51.0bn over the same period.
However, the total number of claims fell by 17% to 40,325, continuing the downward trend seen in recent years as HMRC’s more rigorous approach has discouraged the more speculative claims. At the same time, the average claim value increased by 27%, with larger claims accounting for a growing share of total relief claimed.
The figures show that support claimed through the SME and ERIS schemes fell by 29% to £2.3bn, while support claimed through the RDEC and Merged RDEC schemes increased by 29% to £5.9bn as businesses transitioned to the new regimes.
Carrie Rutland, a tax partner at BDO, said: “These are the first figures to show how businesses have responded to the government’s new merged R&D tax relief regime and they point to continued investment in innovation despite a period of significant change for claimants.
“It is encouraging to see qualifying R&D expenditure increase to £51bn and total support claimed rise to £8.2bn, suggesting businesses continue to recognise the value of investing in research and development.
“HMRC also deserves credit for the significant progress it has made in reducing error and fraud in R&D tax relief claims, with the statistics showing an increase in higher value claims. Measures such as the Additional Information Form and enhanced compliance activity appear to have strengthened confidence in the system.
“However, today’s figures also show that the number of claims has continued to fall. Many businesses feel the compliance burden has become increasingly heavy, even where they have a long track record of making legitimate claims.
“As the chancellor prepares for Budget 2026, the next step should be a more targeted approach. He has already stated his intention to reduce the compliance burden on businesses by 25% and we would like to see businesses with strong compliance histories benefitting from a simpler claims process.
“Greater certainty and a more proportionate approach would help innovative businesses invest with confidence in the UK while ensuring taxpayers’ money remains properly protected.”