In 2022-23, R&D tax relief claims saw a notable shift, with a decrease in the number of claims but a slight increase in the total amount of relief granted. The overall relief claimed rose by 1%, reaching £7.5 billion. However, small and medium-sized enterprises (SMEs) experienced a decline, with their claims dropping by 3%. This reduction may be partly attributed to new compliance measures introduced by HMRC, aimed at ensuring that only legitimate claims are processed. These stricter measures are designed to reduce fraudulent or erroneous claims, which have been a concern in previous years.

HMRC’s increased scrutiny on non-compliant submissions indicates a focus on improving the accuracy of claims, even if it means fewer submissions overall. By targeting inaccurate or misleading claims, HMRC aims to preserve the integrity of the R&D tax relief system while still encouraging genuine innovation and research activities. Although this approach may deter some businesses from filing claims, it is expected to result in a higher standard of applications, ensuring that R&D tax relief continues to support eligible companies effectively while minimizing abuse of the system.