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R&D tax credit claims fall as HMRC claim enquiries rise. What can you do to qualify for relief?
20 October 2025
Latest HMRC statistics reveal a fall in the number of SME R&D tax credit claims and a rise in claim enquiries.
Larger R&D-intensive businesses continue to benefit from increased support, but stricter compliance means companies must ensure their claims are accurate and well-evidenced.
These statistics do not include the impacts of the merged R&D expenditure credit (RDEC) or enhanced R&D intensive support (ERIS), they will be covered next year.
HMRC’s September 2025 statistics provide an updated picture of R&D tax credit claims across the UK. The data shows a shift in claimant behaviour following legislative changes, increased compliance checks and the restructuring of R&D incentives.
Key findings include:
Overall R&D claims decreased in the 2023/24 tax year compared to the previous year.
SME scheme claims have fallen, reflecting tighter eligibility rules and compliance scrutiny.
The RDEC claims from larger businesses have remained robust.
Average claim values increased, suggesting more targeted and higher quality submissions.
First-year claimants decreased, indicating reduced awareness or confidence among smaller businesses.
There are several reasons for the decline in SME claims:
HMRC has increased the number of enquiries into R&D submissions.
More robust claim documentation is now required.
Awareness of recent changes, such as the merged R&D scheme, is still developing.
Some businesses are unsure whether their activity still qualifies as R&D for tax purposes.
R&D tax relief continues to be claimed across a wide range of UK industries. The largest claimant sectors include manufacturing, information and communication, professional and technical services, and construction.
Innovations are being driven by companies investing in software development, process improvement, engineering and product design.
To qualify, a project must:
Seek to make a scientific or technological advancement
Resolve technical uncertainties
Require competent professionals to explore potential solutions
Go beyond routine work or standard industry practice
If your business is developing new products, services or systems, or improving existing ones, you may be able to claim R&D tax relief.
Here are practical steps to take:
Review recent and ongoing innovation projects
Identify qualifying staff costs, subcontractor costs and consumables
Maintain clear technical documentation and project evidence
Ensure any claim is directly linked to qualifying R&D activity
Submit claims early to avoid compliance delays
Work with a professional adviser to reduce HMRC enquiry risk
HMRC has launched a new tool to take potential claimants though a number of key tests for qualifying for R&D tax relief. It advises that the services of a competent professional will be needed to help answer some of the questions.
Once all of the questions have been answered, HMRC says that the tool will give the user a clear indication of whether the work carried on is qualifying R&D.
We have extensive experience supporting businesses across a wide range of sectors to prepare robust R&D tax relief claims. Our specialists can review eligibility, identify qualifying expenditure and prepare technical justifications to support your claim.
For more information and to make sure your R&D claims are accurate and compliant, speak to Bishop Fleming’s team today.
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