Accredited official statistics

Research and Development Tax Credits Statistics: September 2025

Updated 30 September 2025

1. Key points

The key points from the 2025 Research and Development (R&D) tax credits publication are:

• the provisional estimated amount of total R&D tax relief support claimed for the tax year 2023 to 2024 was £7.6 billion, a decrease of 2% from the previous year. This corresponds to £46.1 billion of R&D expenditure, 1% lower than the previous year.

• this is the first publication to include statistics affected by the change in relief rates for the SME and RDEC schemes, part of the reform of the R&D reliefs. It also includes the first statistics featuring claimants at the SME intensive rate. The 2023 to 2024 year is also the first full tax year in which all claims must be supported by an additional information form, one of the administrative changes made to the schemes in order to improve levels of compliance in the R&D reliefs.

• following the rate, and other changes, the amount of tax relief claimed through the SME scheme fell by 29% compared with the previous year to £3.15 billion, while the amount of relief claimed through the RDEC scheme increased by 36% to £4.41 billion.

• the provisional estimated number of R&D tax credit claims for the tax year 2023 to 2024 was 46,950, a decrease of 26% from the previous year. The decrease occurred in both schemes, but the most notable impact was in the SME scheme, where the volume of claims is 31% lower than the previous year. In comparison, claims for the RDEC scheme fell by 5%.

• there is a larger drop in the number of claims for up to £15,000 of tax relief compared to larger claims (above £250,000). This has resulted in a 33% increase in the average claim value compared to the previous year. This explains why, despite a large drop in the volume of claims, the total value of R&D relief claimed has only fallen by a small amount. It also reflects the increase in the generosity of the RDEC scheme, which generally has larger value claims than the SME scheme.

• consistent with previous years, there is a concentration of claims by companies with registered offices in London (24% of total claims and 31% of total amount claimed), and the South East (15% of total claims and 20% of total amount claimed). However, the registered office location may not be where all the R&D activity takes place.

• the Information & Communication, Manufacturing, and Professional, Scientific & Technical sectors continued to have the greatest volume of claims, making up 72% of total claims and 71% of the total amount claimed for the tax year 2023 to 2024.

2. Introduction

This is a National Statistics publication produced by HM Revenue and Customs (HMRC). National Statistics are accredited official statistics.

It provides information on the number of companies claiming R&D tax credits and the associated cost to the Exchequer for claims covering accounting periods that end in a particular financial year. The most recent year for which information is available is the 2023 to 2024 tax year. Claims for the tax year 2023 to 2024 can still be submitted past the cut-off date for this publication. The statistics for the latest tax year are provisional and have been adjusted to account for claims not yet received. Additionally, all figures have been independently rounded to the nearest 5 or £5 million. This can lead to components not summing to the totals shown.

Statistics will be revised in next year’s publication to include claims received after the cut-off date, which can sometimes result in large changes between the publications. Similarly, this year’s publication revises figures for tax years 2020 to 2021, 2021 to 2022 and 2022 to 2023.

The statistical tables are published on GOV.UK alongside this commentary document, together with information on the background and methodology.

The next release is planned to be in Autumn 2026.

Statistical contacts: S Austin and M Rowe-Brown; ct.statistics@hmrc.gov.uk

Media enquiries: HMRC Press Office; news.desk@hmrc.gov.uk

3. Changes to R&D tax reliefs covered in this publication

The current edition of these statistics is the first to incorporate some of the changes made to the R&D tax reliefs since the reforms to the R&D reliefs announced at Autumn Statement 2022. For expenditure incurred from 1 April 2023, the SME scheme provides an 86% enhancement to qualifying R&D expenditure, and a credit rate of 10% on losses surrendered. This is a decrease from the 130% enhancement rate and 14.5% credit rate available previously. For the RDEC scheme, the credit rate is now set at 20%, increased from 13%.

The statistics also include the impacts of the enhanced support for R&D intensive SMEs for expenditure incurred from 1 April 2023. This allows loss-making SMEs with qualifying R&D expenditure that is at least 40% of their total expenditure to claim a 14.5% credit for surrendered losses, rather than 10%. R&D intensive SME claimants are represented separately in table RD1 and RD3, however are included within the value of relief for credits and deductions elsewhere in the publication. These statistics also incorporate the impacts of the increase in Corporation Tax (CT) main rate, from 19% to 25%, from 1 April 2023. This increases the value of R&D relief for SME scheme claims with a deduction element, and decreases the amount of RDEC paid out.

The above changes exclusively impact claims relating to the 2023 to 2024 tax year. Where the accounting period straddles the implementation date of 1 April 2023, these impacts are partial.

These statistics do not include the impacts of the merged R&D expenditure credit (RDEC) or enhanced R&D intensive support (ERIS), which affect accounting periods that begin on or after 1 April 2024. These schemes will be covered for the first time in the 2026 edition of these statistics.

4. Number of claims

The total number of R&D claims for the tax year 2023 to 2024 is estimated to be 46,950 – a decrease of 26% from the previous year (figure 1 and table RD1).

This is comprised of 36,885 Small or Medium-sized Enterprise (SME) scheme claims and 10,065 Research and Development Expenditure Credit (RDEC) scheme claims. The number of SME scheme claims can be broken down as: 16,020 claims which are purely for a deduction from CT liability and 20,865 claims which include a payable tax credit element in the tax year 2023 to 2024. This includes 3,990 claims for companies who qualify as R&D intensive. Overall, there was a 31% decrease in the number of SME scheme claims compared to the previous year.

In the RDEC scheme, 3,335 claims are from large companies, and 6,730 claims are from SMEs claiming under the RDEC scheme, for example because they are undertaking the R&D as subcontractors, or the R&D is subsidised, and so they are unable to claim under the SME scheme. This is a 5% decrease in the number of RDEC claims since last year. This breaks down as a 12% decrease in large company claimants and a 2% decrease in RDEC claims made by SMEs.

Figure 1: Number of claims for R&D tax credits by scheme, 2016 to 2017 to 2023 to 2024

The fall in the number of R&D claims for the tax year ending March 2024, in particular for the SME scheme, follows a similar fall in claim volumes in the 2022 to 2023 tax year. This follows a number of recent changes to the schemes that impact claims relating to the 2023 to 2024 tax year. These include:

• a decrease in the generosity of the SME scheme – the enhancement rate has fallen from 130% to 86%, and the credit rate has fallen to 10% from 14.5%.
• an increase in generosity of the RDEC scheme – the RDEC credit rate has increased to 20% from 13%.
• additional support for R&D intensive SMEs – loss-making SMEs with R&D expenditure that is at least 40% of their total expenditure can claim the 14.5% credit rate in the SME scheme.
• an increase in the CT main rate, from 19% to 25% – this affects the value of the relief for claimants, increasing the value of SME deduction claims and decreasing the value of RDEC claims.
• the additional information form (AIF) – this was brought in alongside other administrative changes to the schemes in order to improve levels of compliance in the R&D reliefs, and is mandatory for all R&D claims submitted from 8 August 2023. Given the timing of the AIF’s introduction, this meant that around half of claimants in the 2022 to 2023 tax year needed to file an AIF to support their claim. For the 2023 to 2024 tax year, all claims now require an AIF.

5. Amount of relief claimed

The total support claimed through both R&D schemes for the tax year 2023 to 2024 is estimated to be £7.6 billion (figure 2 and table RD2). This is a decrease of 2% from last year’s total of £7.7 billion.

Figure 2: Total support claimed through R&D tax credits by scheme, 2016 to 2017 to 2023 to 2024 (£ million)

The £7.6 billion is comprised of £3.15 billion claimed through the SME scheme and £4.41 billion claimed through the RDEC scheme. Within the RDEC scheme £3.6 billion has been claimed by large companies and £795 million has been claimed by small and medium-sized companies. This means the value of relief claimed via RDEC is now higher than that of the SME scheme, following the changes to the relief rates in these schemes. As a result of the rate changes, the total support claimed through the SME scheme has decreased by 29% compared with the previous year. In contrast, the total support claimed through the RDEC scheme has increased by 36% since the previous year.

6. R&D expenditure

Given the sizeable changes in the rates of relief available to claimants in the 2023 to 2024 tax year compared to previous years, the amount of qualifying R&D expenditure used to claim R&D tax relief provides a better comparator of recent trends. Qualifying R&D expenditure is estimated to be £46.1 billion for the tax year 2023 to 2024, a decrease of 1% from the previous year (figure 3 and table RD4). The represents a modest fall given the drop in the number of claims for R&D relief. 69% of all qualifying R&D expenditure in the latest year was by companies claiming under the RDEC scheme.

Figure 3: R&D expenditure used to claim R&D tax credits by scheme, 2016 to 2017 to 2023 to 2024 (£ million)

7. Regional analysis

Figure 4 and table RD5 show the regional distribution of R&D tax credit claims by the company’s registered address for the tax year 2023 to 2024. The registered address may not be where actual R&D activity is carried out.

The following figures reflect the top 3 regions with the highest number of claims and total amount claimed. Companies with registered offices in London accounted for 24% of total claims and 31% of the total amount claimed. The South East represented 15% of total claims and 20% of the total amount claimed. The East of England contributed 10% of total claims and 13% of the total amount claimed for the tax year 2023 to 2024.

The proportions of claims and amount claimed by region are in line with those seen in recent years.

Figure 4: Number and amount of R&D tax credits claimed by region of company registered address, 2023 to 2024 (£ million)

8. Industry sector analysis

Figure 5 and table RD6 show the distribution of R&D tax credit claims by industry sector for the tax year 2023 to 2024. The coding of industry sectors may not always reflect the sector of companies’ R&D activity.

Figure 5: Number and amount of R&D tax credits claimed by industry sector, 2023 to 2024 (£ million)

There is a concentration in the number of claims in the Information & Communication (26%), Manufacturing (26%) and Professional, Scientific & Technical (19%) sectors, accounting for 21%, 26% and 24% of the total amount claimed, respectively. These trends remain similar to previous years.

Figure 6: R&D tax credit claims by industry sector, % change between 2021 to 2022 and 2022 to 2023

Figure 6 shows that when overall claims began to fall between the 2021 to 2022 tax year and the 2023 and 24 tax year, they fell across all industry sectors. 4 sectors in particular have seen a decrease of over 70% since the 2021 to 2022 tax year: Accommodation & Food, Wholesale & Retail Trade, Repairs, Real Estate and Education. Those with the smallest decrease over the years include our 3 largest sectors, as well as Mining & Quarrying, and Agriculture, Forestry & Fishing.

9. Cost band analysis

Figures 7 and 8, and table RD7, show the distribution of R&D tax credit claims by cost band for the tax year 2023 to 2024.

There is a concentration in the number of claims in the lower bands (61% in cost bands up to £50k), which corresponds to the large volume of claims in the SME scheme. The decrease in claims from the 2021 to 2022 tax year to the 2023 to 2024 tax year is primarily observed in the lowest bands.

Figure 7: Number of R&D tax credit claims by cost band, 2023 to 24

Figure 8: Amount of R&D tax credits claimed by cost band, 2023 to 2024 (£ million)

The largest concentration in amount claimed is in bands £1 million and above (54%), corresponding to R&D claims made by the largest companies. This proportion has increased by 11 percentage points in comparison to the previous year, in part due to the increased 20% RDEC rate.

10. First-time applications

Figure 9 and table RD8 show the number of first-time applicants in the SME and RDEC schemes for each year. Partial data for the tax year 2023 to 2024 has not been included in figure 9.

In the tax year 2022 to 2023, there was a 41% decrease in the overall number of first-time applicants from the previous year. This is the fourth consecutive year that the overall number of first-time applicants has decreased. Prior to the 2019 to 2020 tax year, the number of first-time applicants had increased year-on-year.

Figure 9: Number of first-time R&D tax credits claimants up to 2022 to 2023

For the tax year 2022 to 2023, the number of first-time applicants in the SME scheme was 7,230, a decrease of 45% from the previous year.

The number of first-time applicants for the RDEC scheme was 2,000 for the tax year 2022 to 2023, a 21% decrease from the previous year.

11. Changes to the R&D scheme

At the 2022 Autumn Statement changes to R&D relief rates were announced, taking effect for expenditure from 1 April 2023 onwards. As noted above, these changes are reflected in the figures for the 2023 to 2024 tax year in this publication.

Until 1 April 2024, the 2 reliefs in operation were the R&D Tax Credits for small and medium enterprises (SME scheme) and the Research and Development Expenditure Credit (RDEC). For accounting periods beginning on or after 1 April 2024, a new, single expenditure credit scheme started for companies of all sizes. Alongside this, an alternative scheme is available for R&D intensive, loss-making SMEs to claim instead, which follows the existing SME scheme for R&D intensive companies (though the intensity threshold is reduced to 30%). Therefore, the 2 reliefs available from 1 April 2024 are the Enhanced R&D Intensive Support (ERIS) and the merged scheme for R&D Reliefs.

The merged RDEC and ERIS schemes are not reflected in the statistics in this publication, which cover claims up to the tax year 2023 to 2024. Statistics on claims for the merged RDEC and ERIS schemes will be presented for the first time in the 2026 publication, which will cover claims relating to the 2024 to 2025 tax year and earlier.

12. Error and Fraud

In HMRC’s 2025 annual report an updated estimate of error and fraud in the R&D schemes was published. This was based on claims relating to the 2022 to 2023 tax year and includes partial impacts of administrative changes to the schemes. For illustrative purposes HMRC also considered the possible error and fraud position for the tax years 2023 to 2024 and 2024 to 2025. Details can be found on page 53 of HMRC’s annual report and accounts 2024 to 2025.

The statistics contained in this publication do not include any assessment of the levels of error and fraud within the schemes.