{"id":1844,"date":"2025-10-02T12:32:47","date_gmt":"2025-10-02T12:32:47","guid":{"rendered":""},"modified":"2026-07-26T16:32:48","modified_gmt":"2026-07-26T14:32:48","slug":"an-examination-of-2025s-rd-tax-credit-statistics","status":"publish","type":"article","link":"https:\/\/leyton.com\/uk\/insights\/articles\/an-examination-of-2025s-rd-tax-credit-statistics\/","title":{"rendered":"An examination of 2025\u2019s R&D Tax Credit Statistics"},"content":{"rendered":"\t\t
\n\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\n

R&D tax relief is hugely important for helping to fund innovation in the UK. But according to HMRC\u2019s Research and Development Tax Credits Statistics: September 2025 report<\/a>, the total relief claimed for the 2023-24 tax year has decreased by 2%. The report also shows that qualifying R&D expenditure is down by 1%. The drop reflects the impact of HMRC\u2019s compliance rule changes, which rightly aim to reduce error and fraud.<\/p>\n\n\n\n

One of the biggest factors in the fall is the introduction of the pre-claim notification<\/a> for businesses claiming R&D Tax Credits<\/a> for the first time (or if they haven\u2019t claimed in their last three accounting periods). As businesses now have to submit their notification within six months of the end of the accounting period that they plan on claiming for, we sadly expect that claim volumes could fall even further next year \u2013 especially for SMEs, who are more likely to be first-time claimants.<\/p>\n\n\n\n

The launch of the merged R&D scheme<\/a> may have a positive impact for large businesses, who can now benefit from the inclusion of subcontractor costs \u2013 but more still needs to be done to support smaller businesses, which are often the driving force behind innovation in the UK.<\/p>\n\n\n\n

While we strongly welcome the reduction in fraudulent claims, we also recognise that stricter regulations may be putting off legitimate businesses who might be intimidated by the complex paperwork, concerned about HMRC raising a lengthy Enquiry into their claim,<\/a> or simply worried about making an error within their claim. At Leyton UK, we\u2019ll continue to play an active role in educating businesses about R&D tax relief, while ensuring all claims are fully compliant with HMRC\u2019s strict regulations.<\/p>\n\n\n\n

The numbers also show signs of a sluggish economy, which is yet another reminder of how difficult things have been for UK businesses over the last couple of years. What’s especially worrying is that these stats cover the period before the rise in Corporation Tax and the introduction of global tariffs, which means that the environment for innovation is likely to become even more challenging.<\/p>\n\n\n\n

Below, we drill into HMRC\u2019s Research and Development Tax Credits Statistics: September 2025 report, which helps to reveal the health of innovation investment in the UK.<\/p>\n\n\n\n

Number of R&D Tax Credit claims by financial year, 2019-20 to 2023-24<\/mark><\/h2>\n\n\n\n\n \n \n \n
Financial Year<\/th>\n SME Total<\/th>\n RDEC Total<\/th>\n Total Claims<\/th>\n Total Returns<\/th>\n Total Companies<\/th>\n <\/tr>\n <\/thead>\n
2019\u201320<\/td>74,190<\/td>9,815<\/td>84,005<\/td>83,420<\/td>80,845<\/td><\/tr>\n
2020\u201321<\/td>76,135<\/td>11,045<\/td>87,180<\/td>85,490<\/td>82,785<\/td><\/tr>\n
2021\u201322<\/td>71,805<\/td>11,415<\/td>83,220<\/td>81,205<\/td>78,645<\/td><\/tr>\n
2022\u201323<\/td>53,150<\/td>10,635<\/td>63,780<\/td>61,820<\/td>60,050<\/td><\/tr>\n
2023\u201324<\/td>36,885<\/td>10,065<\/td>46,950<\/td>45,160<\/td>44,065<\/td><\/tr>\n <\/tbody>\n<\/table>\n\n\n\n
<\/div>\n\n\n\n

Note: While the SME scheme stats include the <\/em>enhanced support for R&D intensive SMEs (ERIS)<\/em><\/a>, they don\u2019t take into account the <\/em>merged R&D expenditure credit<\/em><\/a> as this didn\u2019t come into play until on or after 1 April 2024. The same is true for all of the tables and charts referenced within this article.<\/em><\/p>\n\n\n\n

The numbers are provisional, but the current estimates show a significant drop in companies claiming across the board. The total number of R&D Tax Credit claims fell from 63,780 in 2022-23 to 46,950 in 2023-24 \u2013 a higher than ever drop of 26%. There were also 27% fewer returns, and 27% fewer companies claiming. While the fall largely comes from a 31% drop in the number of SME scheme claims<\/a>, there has also been a 5% decrease in RDEC claims<\/a>.<\/p>\n\n\n\n

The decline, which started to accelerate in 2022-23, can partly be attributed to HMRC\u2019s stricter compliance rules, which aim to reduce fraud and error. But even taking compliance rules into account, the fall in claims is still deeply concerning, and marks a continuing year-on-year trend of decline, which is clearly illustrated by the table below:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Amount of R&D relief claimed by financial year (\u00a3 million), 2019-20 to 2023-24<\/mark><\/h2>\n\n\n\n\n \n \n \n
Financial Year<\/th>\n SME Total<\/th>\n RDEC Total<\/th>\n Total cost for all schemes<\/th>\n <\/tr>\n <\/thead>\n
2019\u201320<\/td>4,185<\/td>2,710<\/td>6,890<\/td><\/tr>\n
2020\u201321<\/td>4,200<\/td>2,655<\/td>6,855<\/td><\/tr>\n
2021\u201322<\/td>4,620<\/td>2,980<\/td>7,600<\/td><\/tr>\n
2022\u201323<\/td>4,440<\/td>3,245<\/td>7,690<\/td><\/tr>\n
2023\u201324<\/td>3,145<\/td>4,405<\/td>7,555<\/td><\/tr>\n <\/tbody>\n<\/table>\n\n\n\n
<\/div>\n\n\n\n

In the 2022-23 tax year, we saw a decline in the number of claims but a small rise in the actual amount of R&D relief claimed. Unfortunately, for 2023-24 there has also been a decline in the total amount of relief claimed, falling from \u00a37,690 million to \u00a37,555 million.<\/p>\n\n\n\n

The fall comes from a 29% drop in the amount of relief claimed via the SME scheme. There was actually a 36% rise in relief claimed via the RDEC scheme, which means that for the first time more relief was paid out via RDEC than the SME scheme (and this is before <\/em>the merged R&D expenditure credit scheme came into effect):<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Amount of qualifying R&D expenditure by financial year (\u00a3 million), 2019-20 to 2023-24<\/mark><\/h2>\n\n\n\n\n \n \n \n
Financial Year<\/th>\n SME Scheme<\/th>\n RDEC by LCs<\/th>\n RDEC claims by SMEs<\/th>\n All R&D schemes<\/th>\n <\/tr>\n <\/thead>\n
2019\u201320<\/td>15,510<\/td>23,150<\/td>4,275<\/td>42,940<\/td><\/tr>\n
2020\u201321<\/td>15,695<\/td>21,230<\/td>3,830<\/td>40,760<\/td><\/tr>\n
2021\u201322<\/td>17,270<\/td>23,265<\/td>4,570<\/td>45,110<\/td><\/tr>\n
2022\u201323<\/td>16,240<\/td>24,880<\/td>5,590<\/td>46,710<\/td><\/tr>\n
2023\u201324<\/td>14,505<\/td>25,765<\/td>5,800<\/td>46,070<\/td><\/tr>\n <\/tbody>\n<\/table>\n\n\n\n
<\/div>\n\n\n\n

The estimates show that qualifying R&D expenditure has fallen slightly by 1%, from 46.7 billion in 2022-23 to 46 billion in 2023-24. Most of the R&D expenditure was invested by large companies and SMEs claiming through the RDEC scheme (69%).<\/p>\n\n\n\n

Regional Growth<\/mark><\/h2>\n\n\n\n\n \n \n \n
Region<\/th>\n Total cost (\u00a3 million), 2022\u201323<\/th>\n Total cost (\u00a3 million), 2023\u201324<\/th>\n Total cost growth (%)<\/th>\n Total Expenditure (\u00a3 million), 2022\u201323<\/th>\n Total Expenditure (\u00a3 million), 2023\u201324<\/th>\n Total expenditure growth (%)<\/th>\n <\/tr>\n <\/thead>\n
North East (England)<\/td>140<\/td>115<\/td>-17.86%<\/td>780<\/td>670<\/td>-14.10%<\/td><\/tr>\n
North West (England)<\/td>530<\/td>490<\/td>-7.55%<\/td>2,915<\/td>2,855<\/td>-2.06%<\/td><\/tr>\n
Yorkshire and The Humber<\/td>320<\/td>265<\/td>-17.00%<\/td>1,840<\/td>1,550<\/td>-15.76%<\/td><\/tr>\n
East Midlands (England)<\/td>335<\/td>315<\/td>-5.97%<\/td>1,975<\/td>2,030<\/td>2.78%<\/td><\/tr>\n
West Midlands (England)<\/td>465<\/td>565<\/td>21.51%<\/td>3,070<\/td>3,605<\/td>17.43%<\/td><\/tr>\n
East (England)<\/td>890<\/td>1,015<\/td>14.04%<\/td>5,725<\/td>6,305<\/td>10.13%<\/td><\/tr>\n
London<\/td>2,555<\/td>2,320<\/td>-9.19%<\/td>15,155<\/td>13,905<\/td>-8.25%<\/td><\/tr>\n
South East (England)<\/td>1,385<\/td>1,475<\/td>6.50%<\/td>8,930<\/td>9,250<\/td>3.58%<\/td><\/tr>\n
South West (England)<\/td>370<\/td>350<\/td>-5.41%<\/td>2,110<\/td>2,040<\/td>-3.32%<\/td><\/tr>\n
Wales<\/td>150<\/td>115<\/td>-23.33%<\/td>800<\/td>670<\/td>-16.19%<\/td><\/tr>\n
Scotland<\/td>365<\/td>360<\/td>-1.37%<\/td>2,185<\/td>2,160<\/td>-1.14%<\/td><\/tr>\n
Northern Ireland<\/td>155<\/td>140<\/td>-9.68%<\/td>960<\/td>860<\/td>-10.35%<\/td><\/tr>\n
Unknown<\/td>30<\/td>25<\/td>-16.67%<\/td>265<\/td>170<\/td>-35.98%<\/td><\/tr>\n
Total<\/td>7,690<\/td>7,555<\/td>-1.76%<\/td>46,710<\/td>46,070<\/td>-1.37%<\/td><\/tr>\n <\/tbody>\n<\/table>\n\n\n\n
<\/div>\n\n\n\n

While the amount of relief claimed and overall R&D expenditure is down, there are some regional success stories hidden within the figures:<\/p>\n\n\n\n