New HMRC figures show that UK firms spent £51 billion on research and development (R&D) that qualified for tax relief in 2024–25. This was up 7% on the year before. The figures, released on 29 September 2026, also show £8.2 billion in R&D tax relief claims. That was up 5% from £7.8 billion.
Yet far fewer firms made claims. The figures are early estimates. They cover costs tied to tax claims, not all UK R&D spending. That is why the rise needs a closer look.
Why Did R&D Tax Relief Claims Fall by 17%?
HMRC puts the number of claims at 40,325, down 17% in one year. The average claim rose 27% to about £203,000. Just 6% of claims made up 69% of all relief.
Claims by small and medium-sized firms (SMEs) fell 19%. Claims by large firms rose 4%.
HMRC says the required Additional Information Form (AIF) is likely a key cause. This form asks firms to give more details on their work and costs. But the data cannot show why each firm stopped claiming.
Which Firms Drove the Rise in R&D Spending?
Large firms had £30.2 billion in qualifying R&D costs, up 14%. SMEs had £20.7 billion, down 3% from £21.3 billion. Large firms claimed £4.6 billion in relief. SMEs claimed £3.6 billion.
This shows that growth was not shared by firms of all sizes.
What Has Changed in the UK R&D Tax Relief Schemes?
For periods starting on or after 1 April 2024, most firms use the merged R&D Expenditure Credit (RDEC) scheme. It gives a 20% taxable credit on eligible costs. Enhanced R&D Intensive Support (ERIS) is for some loss-making SMEs with high R&D spending.
The latest HMRC report is the first to cover these two new schemes.
Relief through the old SME scheme and ERIS fell by 29% to £2.3 billion. This does not mean all SME relief fell that much. Many now use merged RDEC. Relief under RDEC and merged RDEC rose 29% to £5.9 billion.
Rules also changed for work done by contractors. The firm that chose and planned the R&D may be able to claim. Both sides should check the terms before they claim.
What Is the Latest HMRC R&D Tax Relief Update?
On 28 October 2026, the government set out plans to cut forms. A claim notice will no longer be needed for claims made from 1 April 2027. HMRC also plans to make the AIF simpler from autumn 2027.
Current rules still apply. HMRC will reject a claim if the AIF is missing or filed after the tax return. Firms must also send a claim notice where the current rules require one.
What Should UK Businesses Do as R&D Spending Rises?
The latest numbers show that firms are spending more on R&D, but fewer of them claim tax relief. Small and mid-size firms should take this as a sign to check how they pay for and report their new ideas.
Firms that build new software, products or tech processes should check if their spending can get R&D tax relief. They should also keep clear records of what each project cost and what problems the team tried to solve.
HMRC has new rules now, so firms must check if they qualify, pick the right scheme, and meet the filing dates. If they do this early, they can avoid claims being turned down and get more from the relief they can use.
How LANOP Helps Businesses Make the Most of R&D Tax Relief
UK firms now spend £51 billion on R&D, which shows they still want to invest in new ideas. But the number of tax relief claims has dropped a lot. Firms, and small firms in particular, need to learn the new rules. If they don’t, they may miss relief they could have claimed.
LANOP Business & Tax Advisors helps UK firms check their R&D work. It helps them find the costs they can claim and understand what tax relief they can get under the latest HMRC rules. The team helps you write correct claims, keep good records, and file on time.
With the right tax advice, you can manage your R&D costs better. You can lower the risk of mistakes in your claim. You can also make smarter choices about what to spend on new ideas in the future.
If your business is investing in research, software, or technical development, contact LANOP. We review your R&D tax relief position and ensure your claim follows the current rules.
