ForrestBrown, the UK’s specialist R&D tax consultancy, managing director Sara Brigden has commented on the HMRC research and development (R&D) September 2025 tax credits statistics.
Recent figures indicated a slight downturn in the amount of R&D tax relief claimed in the UK for the tax year 2023 to 2024.
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The provisional estimate of £7.6bn ($10.2bn) represents a 2% decrease from the prior year, with R&D expenditure also falling by 1% to £46.1bn ($62.03bn).
These figures are the first to reflect the impact of adjustments to the relief rates for both the smal, medium enterprise (SME) and R&D expenditure credit (RDEC) schemes, as well as the introduction of the SME intensive rate and the requirement for an additional information form to support all claims.
The SME scheme saw a 29% reduction in tax relief claims, down to £3.15bn, while the RDEC scheme experienced a 36% increase to £4.41bn.
Additionally, the overall number of R&D tax credit claims also diminished, with a 26% year-on-year decrease to 46,950.
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By GlobalDataThe SME scheme was particularly affected, with a 31% reduction in claims, while the RDEC scheme saw a more modest 5% drop.
Brigden has voiced concerns over the discouraging effect these changes may have on smaller businesses considering investing in innovation.
She noted a 45% fall in first-time claims from SMEs, attributing this to the lower relief rates and the more demanding administrative requirements, which could act as a deterrent.
Larger businesses have seen a benefit from the increased share of the relief at 47%, while the number of RDEC claims has also decreased, but to a lesser extent, Brigden stated.
She pointed out that the increased RDEC rate has made it more feasible for larger companies to undertake projects with a higher degree of financial certainty.
Brigden said: “While recent reforms have had a welcome impact on reducing error and fraud, we would caution against any further changes that risk undermining R&D investment. Doing so could detract from the core – and positive – purpose of the incentive: to drive private sector innovation.”
Prior to this, HMRC earmarked £2.4bn for tax reliefs and expenditure credits for the creative industries for the fiscal year ending 31 March 2024, as reported by RSM UK based on the latest statistics.
