HMRC’s latest R&D tax relief statistics for the period 2022-2023 make for interesting reading, and we’ve broken down some of the key figures for you. TheR&D tax relief scheme has undergone significant legislative and compliance reform in recent years to reduce fraud and error, while attempting to maintain the scheme’s generosity. We’ve provided some key highlights from the statistics below, along with information as to how we’re able to assist any claimant companies looking to submit a claim for Research and Development Tax Relief.

The Data Analysed

Taking into account submissions made to 31 May 2024, the number of claims fell in 2022-23 by more than 21%, dropping to just under 66,000. This decline was primarily driven by a 23% reduction in the more generous SME claims, while there was a 9% increase in the less generous RDEC claims.

Despite the overall decrease in the number of claims, the average claim value rose by 28%, aided by an increase in the number of claims with values above £250,000. Interestingly, the number of claims with values up to £15,000 saw a significant decrease.

Around two-thirds of claims were made by just three sectors: Information & Communication, Manufacturing, and Professional, Scientific & Technical sectors. Four sectors — Wholesale & Retail Trade, Accommodation & Food, Real Estate, and Education — saw a substantial drop in claims. This reduction is not entirely unexpected as these sectors are generally not associated with high levels of R&D or innovation, making them less likely to be eligible for the scheme.

The number of first-time claimants also declined for the fourth consecutive year.

New requirements and regulations may cause this number to drop further if first time claimants are unaware of these new rulesets. Two new forms have been introduced to the process: the Claim Notification Form and the Additional Information Form. The Claim Notification Form essentially expedites the deadline for an R&D claim by requiring the claimant company to notify HMRC of the intention to make a claim for R&D tax relief within 6 months of the end of the accounting period.

The rules around this form can be complex, and failing to submit it in a timely manner can invalidate your claim entirely. At Folio, our consultants ensure you never miss a deadline or the potential need for a form submission by providing timely alerts and regular prompts. We’ve included more information in another of our articles found here.

The Additional Information Form is required when the claim has been prepared and this must be submitted ahead of any claim for R&D tax relief through the associated Corporation Tax Return.

How Can Folio Help?

R&D tax relief remains an attractive incentive, and at Folio, we specialise in helping innovative companies legitimately maximise their R&D tax relief. We guide you through any new requirements of the R&D scheme and ensure that you submit a fully compliant R&D claim. If you choose to work with us, we will collaborate closely with you to complete the Claim Notification Form, document qualifying R&D activities, analyse financial costings, and prepare a robust R&D claim.

Our aim is to make your R&D claim submission process as smooth as possible. Get in touch with us today to discover how we can support your R&D claim.