HMRC’s September 2025 R&D statistics, covering 2023-24, show a system that shrank in participants but not in money. Claims fell 26% to 46,950, total relief held broadly steady at about £7.6 billion, and the average claim value rose by around a third. Fewer companies are claiming; those that still claim are claiming more.
This release is also the first to reflect the April 2023 reforms: the rebalanced SME and RDEC rates, the intensive rate for R&D-heavy SMEs and the mandatory Additional Information Form from August 2023.
What are the headline numbers?
| Measure (2023-24) | Movement on prior year |
|---|---|
| Number of claims | 46,950, down 26% |
| Total relief claimed | About £7.6bn, down about 2% |
| Average claim value | Up by about a third |
| Qualifying R&D expenditure | £46.1bn, down 1% |
The contrast between a 26% fall in claims and a 1% fall in underlying expenditure is the story of the report: R&D activity held steady while participation dropped sharply.
Why did claim numbers fall so hard?
Two forces, both pulling the same way. SME claims fell around 31% while RDEC claims fell only about 5%, so the exit was concentrated among smaller and first-time claimants, the group most exposed to the new compliance load and the reduced SME rates. Claims below £15,000 largely disappeared from the data, which is what drove the average value up.
The second force is cleaner: some claims that left the system should never have been in it. HMRC has said for years that a minority of advisers were filing claims containing non-qualifying work. As those advisers exit under scrutiny, their clients’ claims exit with them. HMRC’s own estimates support this reading: error and fraud in the relief fell from 17.6% in 2021-22 to 5.9% in 2024-25.
What does RDEC overtaking the SME scheme signify?
2023-24 is the first year RDEC exceeded the SME scheme by value: £4.41bn against £3.15bn, a 36% rise against a 29% fall. Rate changes explain much of it, alongside SMEs claiming under RDEC because of grant funding or subcontracting positions under the old rules.
It is also the last release built around the SME-versus-large split. From April 2024 the merged scheme covers all companies, and future releases will instead compare R&D-intensive SMEs claiming ERIS against everyone else. The interesting dividing line stops being company size and becomes R&D intensity.
Where does the relief go?
Where it always has. Companies registered in London took around 24% of claims and 31% of value, the South East 15% and 20%, though HMRC notes a registered office is not necessarily where the R&D happens. Three sectors, Information and Communication, Manufacturing, and Professional, Scientific and Technical, accounted for 72% of claims and 71% of support. For research-heavy fields like life sciences, the concentration is unsurprising: that is where the qualifying work is easiest to identify and evidence.
What should claimants take from the 2025 report?
The compliance era is doing what it was designed to do: squeezing out weak claims while leaving genuine R&D spend intact. For a company doing real qualifying work, the numbers are reassurance, not warning. But they also describe an environment where HMRC checks roughly one in six claims, so the cost of a poorly prepared submission has never been higher; our guide to HMRC enquiries explains what that scrutiny looks like in practice.
The 2026 release will be the first to show the merged scheme and ERIS in the data, including whether smaller genuine claimants return as the rules settle. We will analyse it here when it lands. Until then, if you want to understand where your company sits in the current system, start with which R&D scheme applies to you or talk it through with a chartered adviser.
Written by Matthew Jones ACA CTA. Last reviewed July 2026.
Sources
- R&D tax credits statistics, September 2025 — claim numbers, total support and the sector and regional splits.
- HMRC’s approach to R&D tax reliefs 2023–24 — 17% of claims checked, 500-plus compliance staff and estimated error and fraud of 17.6%.
- NAO: HMRC Accounts 2024–25 — the revised error and fraud estimate of 5.9%.
This article describes the rules as they stood at the review date above. The rules change: for the current position, start with our guides or talk to us.
