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.
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.
The 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.
“ForrestBrown MD discusses HMRC R&D tax credit statistics ” was originally created and published by The Accountant, a GlobalData owned brand.
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