The total of £7.55bn claimed across all research and development (R&D) tax credit schemes was only down 2% in 2023-24 compared with the previous year’s £7.69bn, while overall R&D expenditure by companies was £46.1bn, 1% lower.

HMRC measures to stamp out fraudulent claims are now in place, with the introduction of a mandatory additional information form since 2023 meaning it is not so easy to access the tax relief. As a result, total claims plummeted by 26% to 46,950 with SME numbers noticeably down.

However, HMRC calculates fraud and error in 2023-24 claims was £867m, accounting for nearly 10% of claims, albeit down significantly on earlier years.

HMRC’s focus on cracking down on fraudulent claims has generated results, hitting SMEs hard with a 31% fall in claims from smaller businesses to £3.15bn, down from £4.44bn in 2022-23, while larger businesses took advantage of the R&D expenditure credit (RDEC) scheme, which was up by 36% to £4.41bn from previous £3.24bn.

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