R&D Tax Credits Statistics are released annually and provide insight into the number and value of R&D claims across the UK with breakdowns by region and sector.
The latest figures, published today, cover the tax year 2022 to 2023. As claims for this period can still be submitted past the cut-off date for reporting them, the statistics are provisional and have been grossed up to account for claims not yet received. As usual, they will be revised in next year’s publication to include claims received after the cut-off date.
The figures in the report are based on R&D Tax Credits rates prior to the reform of the schemes although there has been some impact from administrative changes that were made to improve compliance.
Claim Volume 2022-23
The statistics show that 65,690 R&D Tax Credit claims were submitted in 2022-23 which is a 21% reduction compared to the previous year.
It is implied that administrative changes, including the introduction of the Additional Information Form (AIF), could be responsible for this large reduction in claim numbers, particularly in the SME scheme. The mandatory AIF form was introduced in August 2023 with companies being required to provide additional information to support their R&D claims.
The volume of claims under the SME scheme is still much greater than under RDEC, however the average claim size for RDEC is generally much larger.
SME Scheme
- 23,805 claims for deduction from CT liability
- 31,520 claims included a payable tax credit element
- 55,325 total number of SME scheme claims (-23% on previous year)
RDEC Scheme
- 3,675 claims from large companies (-11% on previous year)
- 6,690 claims from SMEs* (-9% on previous year)
- 10,365 total number of RDEC scheme claims (-9% on previous year)
65,690 total number of R&D Tax Credits claims (-21% on previous year)
* SMEs can claim under RDEC if they are undertaking R&D as subcontractors, or if the R&D is subsidised.
Claim Value 2022-23
Despite the large drop in the number of claims, the total value of claims has actually increased by 1% compared to the previous year. £7.5 billion worth of R&D Tax Credits were claimed in 2022-23 with the amount of qualifying R&D expenditure used to claim relief estimated to be £46.7 billion (an increase of 4% on the previous year). 65% of this expenditure was from companies claiming under RDEC.
The statistics show an above average drop in the number of claims up to £15,000 and an increase in the number of claims above £250,000. This has resulted in a 28% increase in the average claim value compared to the previous year and explains why the total cost has grown slightly despite the large drop in the volume of claims.
SME Scheme
- £4.5 billion total claimed through SME scheme (-3% on previous year)
RDEC Scheme
- £2.5 billion claimed by large companies
- £545 million claimed by SMEs
- £3 billion total claimed through RDEC scheme (+7% on previous year)
£7.5 billion total claim value (+1% on previous year)
First-time Applicants
The statistics do not report partial data for first-time applicants so the latest figures included are for the tax year 2021-22. An 18% decrease in the overall number of first-time applicants was seen compared to the previous year. This is the third consecutive year that this number has decreased; prior to 2019-20, the number had increased year-on-year. It is reported that this trend appears to continue in the partial data for the tax year 2022 to 2023.
- 13,135 SME scheme first-time applicants (-19% on previous year)
- 2,545 RDEC scheme first-time applicants (-11% on previous year)
- 15,680 – Total number of first-time applicants (-18% on previous year)
Claimant Location & Sector
The regional analysis within the statistics is based on a company’s registered address so does not necessarily reflect the location where R&D is actually carried out. As in previous years, there is a concentration of claims by companies with registered offices in London and the South East with the East of England being the third largest region.
In terms of industry sector, once again there is a concentration in the number of claims in the Information & Communication (25%), Manufacturing (24%) and Professional, Scientific & Technical (17%) sectors, accounting for 24%, 22% and 24% of the total amount claimed.
The complete R&D Tax Credits Statistics report can be viewed on the Government website here.
If you want to check if your R&D activities qualify for R&D Tax Credits, or if you already claim and want to ensure you remain compliant following the recent reforms, please contact us for a FREE consultation.