The Changing Face of R&D Tax Relief: Analysing the 2026 HMRC Data

HMRC’s latest R&D statistics paint an interesting picture of how the UK’s R&D tax relief landscape is changing. At first glance, it seems straightforward: fewer companies are making claims. However, looking beyond the number of claims reveals a more complicated situation. While the number of claims has fallen, both the amount of relief claimed and qualifying R&D expenditure have increased.

Three key R&D statistics from 2026

 So, what’s behind these figures, and what do they mean for businesses making R&D claims?

The SME story 

Merged RDEC changes the picture 

As mentioned previously, the 2024-2025 statistics are the first to incorporate the new Merged RDEC and ERIS schemes, with ERIS replacing the old SME Intensive scheme. The change is clearly visible in HMRC’s statistics. 

Relief claimed through the SME and ERIS schemes fell 29% from the previous year to £2.3 billion, while relief claimed through RDEC and Merged RDEC rose 29% to £5.9 billion. HMRC has attributed this to companies beginning to claim under the new schemes, and 2024-2025 featuring a full year of expenditure claimed at the increased RDEC rate of 20%. 

These latest figures therefore need to be treated carefully when making comparisons with previous years. At face value, a fall in the SME statistics would imply that fewer SMEs are claiming: this is true, but some claims have moved into the Merged RDEC figures instead. 

For businesses and advisers, understanding which regime applies to the relevant accounting period is therefore crucial before drawing conclusions from the statistics. 

£51 billion of qualifying expenditure 

While the amount of relief claimed can be affected by the structure of the relief and changes to rates, qualifying R&D expenditure provides another useful measure of activity alongside claim numbers and the value of relief. The increase shows that expenditure reported in claims rose, despite the fall in claim numbers. 

HMRC estimates that qualifying R&D expenditure reached £51.0 billion for the financial year 2024-2025, an increase of 7% from the previous year. This provides an important counterpoint to the 17% fall in the number of claims. When assessed in tandem, the latest figures do not suggest that businesses are simply carrying out less R&D. The figures show fewer claims alongside higher qualifying expenditure. They do not, on their own, tell us whether fewer businesses are carrying out R&D.  

Of this qualifying expenditure, £20.7 billion was claimed by SMEs (a 3% decrease compared to the previous year), while £30.2 billion was claimed by large companies, increasing by 14%. There is no ‘one-size-fits-all’ answer for why this is the case, but this may be due to HMRC's new rules on contracting out work and the ‘subcontracting chain’. Where SMEs were claiming R&D before, perhaps HMRC's new guidance has solidified that the R&D activity was intended and contemplated by their contractor, the large company, meaning who can claim R&D has shifted with the arrival of the Merged scheme.  

Bigger claims are driving the increase 

The average claim increased by 27% in 2024-2025 compared to the previous year, with HMRC attributing this increase largely to claims worth more than £2 million. The number of claims over £2 million saw a rise of 14%, while the total value of those claims increased by 21% when compared with the previous year. This is especially important when considering the distribution of relief across the claimant population. 

Consistent with patterns observed in previous years, a small proportion of claims (6%) accounted for 69% of the total value of claims in 2024-2025. This shows a marginal increase in concentration compared to the previous year, where 5% of claims accounted for 62% of the total value of relief. 

At the other end of the scale, 58% of claims were for £50,000 or less, accounting for only 6% of the total value of relief. These figures show the stark contrast between the volume of claims and their financial value. 

For businesses with larger R&D claims, this makes getting the technical basis of the claim right particularly important. Where a relatively small proportion of claims represent such a significant proportion of the relief available, even a slight error in a high-value claim can have a substantial financial impact. It stands to reason that these are likely the claims HMRC will approach for their compliance checks, especially now that their volume compliance approach has been abandoned. 

What does this mean for businesses? 

These figures provide useful context, but they do not determine whether an individual business has a valid claim. For businesses preparing a claim, the practical questions remain: which scheme applies to the accounting period, who is entitled to claim for contracted-out work, and how clearly the technical work and qualifying costs can be supported. 

The main message is to look beyond the headline decline. Fewer claims do not necessarily mean less R&D, and changes in the schemes make comparisons with previous years less straightforward.