Total R&D tax relief claims fell 26.4% year-on-year in 2023-24, to an estimated 46,950, the sharpest single-year drop since the scheme was introduced.1 That is not a story about UK tech companies quietly abandoning research and development. It is the visible result of a deliberate HMRC compliance clampdown that has been tightening since August 2023: mandatory claim notification, a detailed Additional Information Form, and a step change in fraud and error checking. Tech founders now claim into a scheme that scrutinises far more closely than it did three years ago, and the sector most exposed to that scrutiny is tech itself.
The numbers: a 26.4% fall to 46,950 claims
HMRC's own statistics tell the story in three figures for the 2023-24 accounting period, the latest year published:
- 46,950 total R&D claims, down 26.4% on the 63,780 claims recorded for 2022-23.1
- £7,555m in relief cost, down from £7,690m the prior year.1
- £46,070m in qualifying R&D expenditure underlying those claims, roughly flat on £46,710m the prior year.1
The claim count has now fallen for three consecutive years, from a peak of 87,180 in 2020-21 down to 46,950, a drop of roughly 46% in three years.1 But look at the cost and expenditure lines alongside the claim count: relief cost is down only marginally and qualifying expenditure is essentially unchanged year-on-year. Fewer companies are claiming, but the pound value flowing through the scheme has not collapsed anywhere near as fast. That gap between the claim-count fall and the cost/expenditure fall is the clearest signal that this is a story about which claims get filed, not about how much genuine R&D spend exists in the UK economy.
Why this is a clampdown effect, not an R&D slowdown
From August 2023, HMRC introduced a sequence of compliance measures aimed squarely at reducing error and fraud in the R&D schemes, which had drawn sustained criticism over estimated non-compliance rates in prior years. The main measures, in the order they took effect:
- Mandatory claim notification for first-time claimants and anyone who has not claimed in the prior three accounting periods, due within 6 months of the period end. Miss it and the claim is void for that period, with no appeal route. See our guide to the notification deadline for the mechanics.
- The Additional Information Form (AIF), a mandatory project-level breakdown of R&D activity and qualifying costs that must reach HMRC before the CT600 is filed. Claims submitted without a valid AIF are stripped out on processing. See our AIF walkthrough.
- A materially expanded compliance and fraud-check operation, including enquiry volumes far above pre-2023 levels, targeting claims that sweep in routine development or lack project-level substantiation.
- The merged R&D scheme itself, replacing the separate SME and RDEC regimes for periods beginning on or after 1 April 2024, which reset the rate and eligibility mechanics companies had built claims around. See the merged scheme explained.
2023-24 is the first accounting-period year in which notification, the AIF, and expanded scrutiny were all operating together for a full cycle. That is a reasonable explanation for why the fall accelerated sharply in this release rather than continuing the smaller declines seen in 2021-22 and 2022-23, when the measures were still phasing in.1
None of this means every company that stopped claiming had a fraudulent or weak claim. Some first-time claimants have plausibly been deterred by the added procedural burden. Some existing claimants have dropped out after failing to meet the 6-month notification window, an unforgiving deadline with no late-filing route. What the data cannot tell you is how much of the 26.4% fall is genuinely non-qualifying claims exiting the system versus genuinely qualifying claimants missing a compliance step. Both are almost certainly present.
Tech is the sector most exposed to the squeeze
The clampdown lands unevenly across the economy, and tech sits at its centre. Information & Communication (SIC section J, the sector code that captures most software, SaaS and IT services companies) is the single largest sector in the UK by R&D claim count in 2023-24:1
| Sector | Total claims | Share of claims | Total cost | Share of cost |
|---|---|---|---|---|
| Information & Communication | 12,305 | 26.2% | £1,565m | 20.7% |
| Manufacturing | 12,120 | 25.8% | £1,975m | 26.1% |
| Professional, Scientific & Technical | 8,925 | 19.0% | £1,850m | 24.5% |
| Top 3 sectors combined | 33,350 | ~71.0% | £5,390m | ~71.3% |
| All other sectors | 13,600 | ~29.0% | £2,165m | ~28.7% |
| UK total, 2023-24 | 46,950 | 100% | £7,555m | 100% |
Information & Communication, Manufacturing and Professional/Scientific/Technical together account for roughly 71% of both claims and cost.1 Software and SaaS businesses sit mostly inside Information & Communication, with a meaningful share also self-classified under Professional, Scientific & Technical depending on the company's registered SIC code. Between them, tech-adjacent activity makes up a large enough share of the total claim population that HMRC's compliance operation is, in practical terms, disproportionately a tech-sector compliance operation. A founder building a claim in 2026 is filing into the segment of the scheme that draws the most enquiry attention, not a quiet corner of it.
For the full year-by-year series, the regional breakdown, and the underlying HMRC tables, see our R&D Tax Relief Usage Index, and for how R&D relief sits alongside grants and other state support available to UK tech companies, see the state support for tech index.
What the squeeze changes for a claim filed today
The clampdown does not mean genuine R&D claims should stop. It means the margin for error in how a claim is built and filed has shrunk to close to zero. Three things now matter more than they did before 2023:
1. Procedure is no longer optional
Claim notification and the AIF are not administrative footnotes. A first-time claimant, or one returning after a three-year gap, that misses the 6-month notification deadline loses the entire claim for that period, regardless of how strong the underlying R&D case is. A claim filed without a valid AIF is removed by HMRC on processing before it is even assessed on its merits. Both failure modes are procedural, not substantive, and both are now common enough that advisers treat them as the first checkpoint, not the last.
2. The eligibility bar is enforced, not assumed
Qualifying R&D must seek an advance in science or technology and resolve genuine technological uncertainty. Routine software development to a known specification does not qualify, and HMRC's expanded compliance checking is specifically built to catch claims that sweep in an entire engineering payroll without project-level substantiation. See our guide to what software R&D actually qualifies before assuming a project belongs in a claim.
3. Claims are advisory-heavy by design
The combined effect of notification deadlines, the AIF's project-level detail requirement, and materially higher enquiry rates is that an R&D claim is no longer a form a founder fills in alongside the CT600. It is a compliance process with hard deadlines starting from the day the accounting period ends, best built with proper advice from the outset rather than reconstructed under time pressure once the notification window is already closing. Loss-making, R&D-intensive companies should also check whether the higher ERIS route applies before defaulting to the standard merged-scheme credit; see the ERIS guide for the 30% intensity test.
If your company is approaching a first R&D claim, or returning after a gap, the procedural clock (notification within 6 months of period end) starts before the substantive analysis is even finished. Speak to us early to confirm your notification position before building the underlying claim. Software and SaaS founders can also see the full R&D content set for software companies, organised by claim stage, and run indicative numbers with the R&D relief estimator.
Sources
- HMRC, Research and Development Tax Credits Statistics: September 2025, and our derived R&D Tax Relief Usage Index. Published under the Open Government Licence v3.0. Data pulled 2026-07-23.