R&D Tax Credits in 2025: Key Statistics, Trends, and Implications
UK R&D Tax Credit Statistics 2025
The latest HMRC statistics reveal a twenty six percent decline in claim volumes, continued concentration in technology and manufacturing sectors, and a stable expenditure base exceeding £46 billion. The data underline both the resilience of innovative activity and the tightening compliance landscape shaping the R&D tax regime.
Each year, HMRC’s publication of R&D tax relief statistics provides an invaluable snapshot of innovation investment across the UK economy. The 2025 release, covering the provisional 2023/24 tax year, signals a period of transition within the regime. Fewer claims were filed compared with previous years, yet aggregate qualifying expenditure has remained broadly consistent, suggesting a move toward larger, more complex submissions concentrated among established innovators.
The decline in claim count follows the introduction of mandatory Additional Information Forms (AIFs) and the Merged RDEC scheme for accounting periods beginning on or after 1 April 2024. Together, these reforms have elevated compliance expectations and placed a premium on the technical precision of claim narratives. Businesses engaging in genuine research and development are increasingly expected to substantiate their claims with robust evidence of uncertainty, methodology, and experimental advancement.
Against this backdrop, the data reveal meaningful shifts in how innovation funding is distributed across sectors. Manufacturing, professional scientific and technical activities, and information and communication continue to dominate, together accounting for over seventy percent of the total R&D tax relief claimed. Meanwhile, emerging fields such as environmental technology and advanced materials have seen modest but steady growth, reflecting the UK’s evolving innovation priorities.
Key Statistical Highlights
Claim Count Year on Year
Claim volume fell twenty six percent in the most recent period, reflecting greater scrutiny and the impact of new administrative requirements.
Qualifying Expenditure Year on Year (£bn)
Qualifying expenditure has remained broadly stable, reflecting consolidation within mature claimant populations and tighter controls on compliance.
Sector Concentration
Claims remain heavily concentrated in manufacturing, professional and technical services, and technology-driven industries. This concentration underscores the relationship between sustained R&D activity and structural innovation capacity.
Interpreting the Data
The contraction in claim count, coupled with a relatively stable expenditure base, suggests a maturing landscape in which quality is displacing quantity. HMRC’s increased scrutiny and the introduction of pre-notification requirements have begun to reduce opportunistic claims while raising the evidential threshold for compliance. As a result, many businesses are investing more heavily in technical documentation and audit preparedness to ensure defensibility under enquiry.
Westlock Partners’ experience across engineering, software, and advanced manufacturing sectors indicates that the most successful claimants are those embedding R&D governance directly within their financial reporting and project tracking systems. In the years ahead, effective coordination between tax, finance, and technical teams will become a defining feature of compliant, resilient R&D tax strategies.