The figure represents a 16% jump on the £623m in tax HMRC suspected was underpaid in the previous year, according to analysis by national accountancy group UHY Hacker Young.

While HMRC has increased its estimate of overclaimed R&D tax credits by big businesses, there are also concerns about the level of claims made by medium sized and smaller businesses.

UHY Hacker Young warns that HMRC is likely to step up investigations into large businesses it believes have overclaimed the relief. The total amount of R&D-related tax relief claimed in the 2019/20 tax year was £7.4bn.

A particular area of focus for HMRC is questionable R&D tax relief claims submitted by unregulated agents. Often these boutique firms have no regulated accountancy or tax professionals and take advantage of customers who are unfamiliar with claiming for R&D.