HMRC R&D tax credit statistics 2026: Fewer claims, more R&D
HMRC’s latest statistics show an R&D tax relief system moving in two directions at once. Claim numbers are falling sharply, but qualifying R&D expenditure and the total value of support are rising. The more important question is what this tells us about who is using the relief, and where the scheme may be heading.
Companies claimed an estimated £8.2 billion of R&D tax relief for 2024 to 2025, 5% more than the previous year. The qualifying R&D expenditure behind those claims reached £51.0 billion, up 7%.
HMRC estimates there were 40,325 claims, down 17% in a year. Claims from SMEs fell by an estimated 19%, while claims made by large companies increased by 4%. The average claim value consequently increased by 27%.
The UK is not simply seeing R&D tax relief contract. Instead, the statistics point towards a system supporting a greater amount of qualifying expenditure through fewer, increasingly valuable claims.
The headline numbers tell two different stories
The contrast becomes clearer when claim volumes and R&D expenditure are put side by side.
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aria-label="HMRC R&D estimates for 2024 to 2025"
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R&D tax relief, qualifying expenditure and claims:
2024 to 2025 estimates and year-on-year changes.
</caption>
<thead>
<tr>
<th scope="col">2024 to 2025 estimate</th>
<th scope="col">HMRC figure</th>
<th scope="col">Year-on-year change</th>
</tr>
</thead>
<tbody>
<tr>
<th scope="row">Total R&D tax relief</th>
<td>£8.2bn</td>
<td>+5%</td>
</tr>
<tr>
<th scope="row">Qualifying R&D expenditure</th>
<td>£51.0bn</td>
<td>+7%</td>
</tr>
<tr>
<th scope="row">Total claims</th>
<td>40,325</td>
<td>-17%</td>
</tr>
<tr>
<th scope="row">SME qualifying R&D expenditure</th>
<td>£20.7bn</td>
<td>-3%</td>
</tr>
<tr>
<th scope="row">Large company qualifying R&D expenditure</th>
<td>£30.2bn</td>
<td>+14%</td>
</tr>
<tr>
<th scope="row">Average claim value</th>
<td>
<span aria-hidden="true">—</span>
<span class="hmrc-table-sr-only">No figure supplied</span>
</td>
<td>+27%</td>
</tr>
</tbody>
</table>
</div>HMRC itself says expenditure may provide a better comparator for recent trends because substantial changes in schemes and relief rates make some of the headline scheme data difficult to compare directly between years.
The distribution of that increase, however, matters. Qualifying expenditure associated with SME claims fell 3%, from £21.3 billion to £20.7 billion. For large companies it increased 14%, reaching £30.2 billion.
That does not demonstrate that SMEs are becoming less innovative. Tax relief statistics measure expenditure included in claims, not all R&D performed across the UK economy. But it does raise an important question about whether smaller companies are becoming less represented within the tax incentive.
The decline in claims is no longer a one-year event
Claim volumes have now been falling for several years. HMRC believes the continuing effect of the Additional Information Form (AIF) is one important driver. The AIF became mandatory for claims submitted from 8 August 2023 as part of wider measures intended to improve compliance.
The latest first-time claimant figures reinforce the direction of travel.
There were 3,405 first-time SME scheme applicants in 2023 to 2024, 53% fewer than in the preceding year. Across the schemes covered by this measure, first-time applications have now fallen for five consecutive years. HMRC has not included partial 2024 to 2025 first-time applicant data in its latest chart.
Higher compliance requirements may have removed claims that should not have been made. Reduced rates under the old SME scheme may also have made very small claims less economically attractive. Some businesses may have decided that the administrative work required no longer justified the potential benefit.
A reduction in erroneous or ineligible claims would indicate the compliance reforms are working as intended. Eligible innovative businesses deciding not to claim because the process feels disproportionate would be a different policy outcome.
R&D tax relief is becoming more concentrated
There is, however, stronger evidence of concentration.
In 2024 to 2025, 58% of claims were worth up to £50,000, but together represented only 6% of the value of relief.
At the other end of the distribution, just 6% of claims were worth £500,000 or more, yet they accounted for 69% of all relief claimed. A year earlier, claims in these higher cost bands represented 62% of the value.
HMRC says this is partly explained by the higher RDEC rate applying for a full year, because RDEC covers many of the largest claimants.
Claims above £2 million are particularly significant. Their number increased by 14%, while their total value rose 21%.
So this is not simply a story of thousands of small claims disappearing while everything else stays unchanged. The upper end of the market is expanding at the same time.
For policymakers, that creates a question worth watching: how broad should participation in an R&D incentive be?
A scheme can deliver substantial support to UK R&D even as claimant numbers fall. But if participation continues to become more concentrated, the total amount of relief paid becomes a less complete measure of how widely the incentive reaches innovative businesses.
The transition to Merged RDEC makes simple SME comparisons misleading
These are the first HMRC statistics incorporating Merged RDEC and enhanced R&D intensive support (ERIS), introduced for accounting periods beginning on or after 1 April 2024.
Most SMEs no longer claim through a separate SME scheme. Unless a loss-making SME qualifies for ERIS, it generally falls within Merged RDEC alongside larger companies.
HMRC estimates that 91% of Merged RDEC claims made during 2024 to 2025 came from SMEs.
This explains why RDEC and Merged RDEC claims increased by 50% while claims under the SME and ERIS categories fell 36%. Those figures do not mean tens of thousands of businesses suddenly moved from being SMEs to large-company claimants. Much of the movement reflects the design of the new relief.
HMRC explicitly says SME-level 2024 to 2025 figures are not comparable with previous years because of these changes.
Three sectors still dominate, but the decline elsewhere is striking
Manufacturing accounted for 27% of claims and 27% of relief. Information & Communication represented 27% of claims and 20% of relief, while Professional, Scientific & Technical businesses accounted for 20% of claims and 24% of relief.
Together, those three sectors generated 75% of claims and 71% of the amount claimed. What is more interesting is what has happened outside those established R&D-heavy sectors.
Between 2021 to 2022 and 2024 to 2025, HMRC reports falling claim numbers across every industry sector. Five recorded declines greater than 75%: Accommodation & Food, Real Estate, Education, Wholesale & Retail Trade and Repairs, and Health & Social Work. These are relatively small claiming sectors, so large percentage changes should be treated carefully.
Even so, the pattern suggests that the contraction in claimant numbers is not confined to one industry.
For businesses, sector averages should never determine whether an activity qualifies. Eligibility depends on the R&D undertaken and the applicable tax rules, not whether a company sits in a sector with historically high claim volumes.
What should businesses take from the figures?
The most useful conclusion is not that R&D tax relief is disappearing. The amount of support and qualifying expenditure are both at estimated record levels in HMRC's latest series.
Nor do the statistics support the conclusion that smaller R&D projects are inherently less valuable or less likely to qualify.
There are fewer claims. Larger claims account for an increasing proportion of relief. First-time participation has been falling. SMEs are moving into a new Merged RDEC framework, while compliance requirements introduced over recent years remain part of the claiming process.
For companies carrying out genuine R&D, that makes good internal processes more important.
The starting question should still be whether your projects meet the statutory conditions for R&D tax relief. From there, businesses need a defensible link between the technological work, the qualifying expenditure and the evidence supporting the claim.
That discipline should not begin when the Corporation Tax return is being prepared. Project records, technical decisions, staff time, subcontracting arrangements and relevant costs are much easier to evidence when they are considered as the R&D happens.
The next HMRC release will tell us more
This year's figures capture an awkward transition period.
The previous SME and RDEC schemes were still relevant to some accounting periods, while Merged RDEC and ERIS applied to accounting periods beginning on or after 1 April 2024. The latest financial year is also provisional because further claims can still be submitted and HMRC has adjusted its estimates for claims not yet received.
HMRC plans its next release for autumn 2027.
That publication should provide a clearer picture of claimant behaviour under the new framework.
The figures worth watching will not just be the total cost of relief. They will be whether SME claim volumes stabilise, whether qualifying SME expenditure begins growing again, whether first-time participation recovers and whether relief continues to become more concentrated among the largest claims.
For now, the 2026 statistics suggest a significant shift: the UK R&D tax relief system is supporting more qualifying expenditure with fewer claims, and increasingly large claims account for much of its value.
Whether that represents a better-targeted incentive or an emerging participation problem cannot yet be answered from the statistics alone. It is the question the next few years of data will need to resolve.
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