Ian Davie
Senior Consultant
R&D tax reliefs are valuable incentives encouraging companies to invest in science and technology innovations, boosting private sector funding and driving UK economic growth. To ensure these reliefs remain effective and cost-efficient, HMRC focuses on addressing non-compliance while ensuring that genuine claimants continue to benefit.
HMRC defines “non-compliance” and “error and fraud” to encompass a spectrum of behaviours, from unintentional mistakes and insufficient care to intentional violations. In the context of R&D reliefs, typical errors occur when companies claim ineligible costs, or the project itself is ineligible.
The most recent HMRC R&D Statistics on R&D claims was released in September. Following the implementation of policy and administrative changes aimed at reducing errors and fraud (outlined in section 2), there has been a decline in the number of claims submitted.
2nd MREP (Mandatory Random Enquiry Programme) to check SME claims compliance
Error & Fraud published July 2024:
| Financial Year | 2020-2021 | 2021-2022 | 2022-2023# | 2023-2024# |
| Total no of claims | 83,240 | 90,000 | 61,000 | |
| SME Claims | 71,905 | 55,325 (-23%) | ||
| Cost of the schemes claimed | £7.6bn | £7.5bn | ||
| No of compliance checks | 8,300 | 9,700 | ||
| Tax recovered | £0 | £0 | £288m | £441m |
| Overall Error and Fraud | 16.7% | 17.6% | 13.3% | 7.8% |
| SME Error and Fraud | 24.4% | 25.8% | 19.5% | 14.6% |
| RDEC Error and Fraud | 3.6% | 4.6% | 1.7% | 2.8% |
| Total error and Fraud | £1.13bn | £1.34bn | £1.05bn | £601m |
| Financial Year | 2022-2023# | 2023-2024# |
| Total no of claims | 90,000 | 61,000 |
| Claims processed in 40 days | 75% | 92% |
| No. of Compliance Checks | 8,300 | 9,700 |
| Tax Recovered | £288m | £441m |
| Proportion of checks resulting in adjustment | 71% | 77% |
Take a look below at TBAT Innovations latest HMRC R&D tax statistics and click here to see how we can support your business with your HMRC R&D tax enquiry.
| Financial Year | 2023-2024 | TBAT 2023-2024 | TBAT 2024-2025 |
| Statutory Review Requests | 822 | 0 | 1 |
| Concluded | 251 | 0 | 1 |
| HMRC Decision upheld | 214 | 0 | 0 |
| HMRC Varied | 33 | 0 | 0 |
| HMRC Decision Cancelled | 5 | 0 | 1 |
| ADR Requests | 153 | 14 | 13 |
| Fully Resolved | 22 | 8 | 6 |
| Partial but ongoing | 5 | 5 | 0 |
| In dispute but ongoing | 12 | 1 | 7 |
| No Resolution | 5 | 0 | 0 |
# – claims for these periods are still being received and figures to be revised.
When it comes to handling HMRC R&D tax enquiries, TBAT Innovation is your trusted partner. We understand the complexities of the process, especially as HMRC has implemented new measures to reduce error and fraud. Our team has a proven track record of successfully managing a high volume of R&D claims, with an excellent resolution rate that reflects our deep understanding of what qualifies as R&D under HMRC’s guidelines.
We handle every aspect of your claim with precision, ensuring it is fully compliant. If you’re facing an enquiry or need help preparing a strong claim, contact us today for expert support that will give you peace of mind.
Though the New RDEC looks very similar in operation to the old RDEC, there are some significant differences about who can claim under different circumstances and what costs can be included. Our latest article covers sub-contractor costs, the exclusion of foreign subcontractor and EPW costs, who contemplated the R&D and SME self funded projects.
The launch of the new HMRC R&D Disclosure Service enables companies that think they have claimed too much R&D tax relief in prior periods to voluntarily declare this and correct their claim. Explore the reasons your claim could be overstated and how this will impact you.
Assists organisations in accessing research and development grant funding across a range of UK and EU schemes and industry sectors.
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