For accounting periods ending in the 2024–25 financial year, HMRC provisionally estimates that claim numbers fell by 17% to approximately 40,325, while the total value of relief increased by 5% to £8.2 billion. The average claim value rose by 27% to approximately £203,000. Strikingly, just 6% of claims accounted for 69% of the total relief claimed, up from 62% in the previous year.
Beyond the headline figures, we think there are some important questions worth exploring, particularly around HMRC's approach to compliance, declining SME participation and how R&D tax relief could better support emerging innovators. What follows is our perspective, with a few observations and ideas shared to encourage constructive discussion and positive change.0,325, while the total value of relief increased by 5% to £8.2 billion. The average claim value rose by 27% to approximately £203,000. Strikingly, just 6% of claims accounted for 69% of the total relief claimed, up from 62% in the previous year.
When Gryff Mason attended the Research and Development Communication Forum (RDCF) in March 2026, HMRC’s compliance strategy was already evolving towards more targeted reviews. HMRC outlined the winding down of high-volume enquiry campaigns, earlier involvement from specialist compliance teams, and the emerging use of AI-assisted tools to support caseworkers reviewing technical material. We explored these developments in our March RDCF insight.
In 2023–24, HMRC reported approximately 9,700 compliance checks, representing 17% coverage, excluding cases handled by its Large Business teams. For 2024–25, around 2,400 claims valued at £500,000 or more accounted for 69% of the total relief claimed. Although a larger claim is not, in itself, evidence of non-compliance, this concentration of value means that reviews of larger claims can carry substantial financial implications. Against this backdrop, we expect greater emphasis on risk-led, technically intensive compliance reviews.
For accountants and finance departments supporting larger businesses, this presents a broader challenge. As R&D claims intersect with a company's wider tax affairs, including its Corporation Tax position, group structure, contractual arrangements and cross-border activities, more intensive compliance checks could place greater demands on finance teams to coordinate technical and financial evidence and assess the implications for tax liabilities, financial reporting, cash flow and future R&D claims, particularly where the business has come to rely on the relief.
Beyond the headline figures, we think there are some important subjects worth exploring, particularly around HMRC's approach to compliance, declining SME participation and how R&D tax relief could better support emerging innovators. What follows is our perspective, with a few observations and ideas shared to encourage constructive discussion and positive change.
As claims increasingly move into the merged scheme, HMRC's broad SME and large-company split remains useful but offers limited insight into the businesses behind those claims. We would welcome more granular annual reporting using established employment-based business-size classifications: micro (0–9 employees), small (10–49), medium (50–249) and large (250 or more), with the large category further divided into 250–499 and 500 or more where relevant. This would provide a clearer picture of how R&D participation is changing across different stages of business growth.
The challenges facing UK SMEs, particularly access to funding, rising operating costs and competitive pressures, have come into sharper focus in recent weeks.
Without sufficient working capital, businesses struggle to invest in R&D and absorb the risks associated with uncertain outcomes. Without continued innovation, they risk losing competitiveness and seeing their margins eroded through competition and commoditisation. These pressures are particularly acute for smaller businesses, many of which are still establishing their commercial position while developing the products, processes, and technologies on which their future success depends.
R&D tax relief is not available to every business, nor does every innovative activity qualify. But where genuine qualifying R&D is being undertaken, we should be considering how the incentive can better support businesses through their earlier and more vulnerable stages.
HMRC's targeted Advance Assurance pilot, launched in May 2026, is a welcome development, offering eligible SMEs greater certainty over specific aspects of their R&D claims before submission. However, the pilot is currently scheduled to run only until May 2027. While greater certainty is important, it addresses only part of the challenge.
Enhanced R&D Intensive Support (ERIS) provides additional relief for qualifying loss-making SMEs, although its 30% R&D intensity requirement remains a relatively demanding threshold.
With the next Budget approaching, we are hopeful there may be headroom for more targeted SME support within the existing framework, without fundamentally changing the merged scheme or its headline relief rates.
With that in mind, we have a few ideas for how R&D tax relief could help emerging innovators navigate incubation and early commercialisation, compete with better-capitalised businesses, and ultimately build sustainable companies here in the UK.
These ideas would need proper consideration, particularly around eligibility, cost, and compliance. However, they illustrate how targeted adjustments could improve the accessibility and practical value of R&D tax relief without requiring another fundamental restructuring of the regime.
The case for improving R&D tax relief does not end with targeted support. As HMRC continues to refine its compliance approach, businesses and advisers should also be able to assess how effectively that scrutiny is working. Across its wider tax activities, HMRC recently reported a record £50.2 billion in compliance yield for 2025–26.
While HMRC publishes estimates of R&D error and fraud and has previously reported compliance checks and outcomes, we would welcome more consistent annual reporting of R&D-specific compliance yield, enquiry volumes, review durations, adjustments and outcomes.
Applying the employment-based business-size classifications proposed earlier to R&D compliance reporting could help show how scrutiny and outcomes differ across micro, small, medium and large businesses. Together with more granular claim statistics, this would help identify where compliance activity is concentrated and assess whether oversight remains proportionate.
Food waste is a significant global challenge. Around one third of all food produced is lost or wasted, contributing to nearly 10% of global greenhouse gas emissions. The economic cost exceeds $1 trillion each year, while more than 700 million people worldwide face hunger.
In the UK, around 12 million tonnes of food are wasted annually, with households responsible for the majority. Much of this food is still edible. For the average household, this equates to roughly £1,000 worth of food thrown away each year.
Reducing food waste starts with better awareness, planning, and everyday habits. Meaningful change depends on consistent action at both an individual and community level.
At Gryff Mason, we are committed to reducing food waste and supporting the communities around us.
We have chosen FoodCycle as our charity of focus, recognising their work to address food poverty and loneliness by bringing people together over shared meals.
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