HMRC R&D Tax Credits Statistics (September 2023)

HM Revenue & Customs Research and Development Tax Credits Statistics

Executive summary September 2023

This executive summary provides an overview of the key findings from the HM Revenue & Customs’ National Statistics on Research and Development (R&D) Tax Credits for the tax year 2021 to 2022.

• The report, produced by HM Revenue & Customs, provides insights into R&D tax credit claims and costs for the tax year 2021 to 2022.
• Data for this period is provisional and may change in subsequent publications due to late claims.
• Statistical tables and additional information are available on GOV.UK.
• The next release is planned for Autumn 2024.

 

Key Points

• The estimated total R&D tax relief support claimed for 2021 to 2022 was £7.6 billion, an 11% increase from the previous year.
• Total R&D expenditure for the same period was £44.1 billion, an 8% increase from the previous year.
• There were 90,315 R&D tax credit claims in 2021 to 2022, a 5% increase from the previous year.
• Claims were distributed across Small and Medium-sized Enterprises (SMEs) and Research and Development Expenditure Credit (RDEC) schemes, with a 6% increase in RDEC claims driven by large companies.
• London and the South East accounted for a significant portion of claims, but registered office location may not correspond to actual R&D activity.
• Information & Communication, Manufacturing, and Professional, Scientific & Technical sectors dominated claims, making up 62% of total claims and 67% of the total amount claimed.

Number of Claims

• In 2021 to 2022, there were 90,315 R&D claims, a 5% increase from the previous year.
• Claims included both SME scheme claims and RDEC scheme claims, with RDEC claims seeing a 6% increase.
• Overall, there was a slight increase in both SMEs and large companies claiming R&D tax relief.

Amount of Relief Claimed

• The total R&D support claimed in 2021 to 2022 was £7.6 billion, an 11% increase from the previous year.
• SME scheme claims accounted for £4.8 billion, while RDEC claims were £2.8 billion.
• Average claim sizes increased by 6%, primarily driven by SME scheme support.

R&D Expenditure

• Qualifying R&D expenditure for 2021 to 2022 was £44.1 billion, an 8% increase from the previous year.
• 60% of this expenditure was by companies under the RDEC scheme, suggesting increased R&D activity since the COVID-19 pandemic.

Regional Analysis

• Claims were concentrated in London (22% of total claims and 32% of total amount claimed) and the South East (15% of total claims and 18% of total amount claimed).
• Registered office locations may not reflect actual R&D activity.
• The distribution of claims and amounts claimed by region remained consistent with previous years.

Industry Sector Analysis

• Information & Communication, Manufacturing, and Professional, Scientific & Technical sectors accounted for the highest number of claims (62%) and the greatest amount claimed (67%).
• These trends remained consistent with previous years.

Cost Band Analysis

• Most claims (69%) fell into lower cost bands (up to £50k), corresponding to the large volume of SME scheme claims.
• The ‘Over £2m’ band accounted for 27% of the total amount claimed, primarily from large companies.

First Time Applications

• There was a 1% decrease in first-time applicants in 2020 to 2021, the second consecutive decrease, primarily driven by a reduction in SME scheme applicants.
• In contrast, first-time applicants for the RDEC scheme increased each year since the 2017 to 2018 tax year.

These statistics provide valuable insights into the utilization of R&D tax credits in the UK, with notable increases in claims and support claimed in 2021 to 2022. The concentration of claims in specific sectors and regions, as well as changes in first-time applicants, highlight trends in R&D activity and support. Further revisions and updates are expected in future publications.

QUESTIONS?

To get your questions on R&D Tax Reliefs answered, or to see if you qualify for a tax relief, contact the TC Group Innovation Tax Reliefs team today.

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