HMRC’s approach to Research and Development tax reliefs
Published 17 July 2023
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1. Context
1.1 Research and development tax reliefs
Research and Development (R&D) tax relief supports companies that work on innovative projects in science and technology.
Innovation is at the heart of the government’s plan to grow the UK economy, so it is vital that HMRC delivers these tax reliefs as effectively and efficiently as possible. It is essential that the support they provide is timely and effectively targeted.
HMRC administers 2 R&D tax relief schemes:
- one aimed at small and medium-sized enterprises (SMEs)
- the R&D expenditure credit scheme (RDEC), aimed at large companies and other companies that aren’t eligible for the SME relief
The number of R&D claims has risen year-on-year. In 2015 to 2016 there were 43,665, totalling £4.0 billion. This had risen to 89,300 claims, totalling £6.6 billion, by 2020 to 2021, the latest year we have complete figures for. On current forecasts HMRC expects the cost of relief for claims received in 2027 to 2028 to total £9.5 billion.
To qualify for R&D tax relief the work must be part of a specific project to make
an advance in science or technology. This definition is based on an international standard.
Claims cannot be made if the advance is in:
- the arts
- humanities
- social sciences, including economics
The project must relate to a company’s trade, either an existing one, or one that it intends to start up based on the results of the R&D.
The work must be part of a specific project seeking to make an advance in the field by attempting to resolve a scientific or technological uncertainty. Projects may research or develop new processes, products and service or improve on an existing one.
To be compliant a company needs to explain how, if successful, the project:
- looks for an advance in the field
- had to overcome scientific or technological uncertainty
- tried to overcome scientific or technological uncertainty
- could not be easily worked out by a professional in the field
To ensure value for taxpayers’ money, the government must balance making the process to claim the reliefs quick and easy with the need to ensure that only eligible claimants benefit from the schemes.
This document sets out the latest HMRC analysis on the scale and shape of non-compliance in R&D tax relief schemes from claims relating to 2020 to 2021. It also sets out the department’s compliance approach to R&D.
1.2 Government action on R&D non-compliance
Concern over abuse and boundary-pushing involving R&D tax reliefs has grown in recent years, particularly amongst SMEs. While HMRC carries out a risk triage of all cases, it can only carry out a detailed examination into a limited number.
Any scheme that provides financial support to large numbers of claimants contains an inherent risk. The government recognised this and launched a review of the R&D tax relief schemes in 2021, to ensure taxpayer money is spent as effectively as possible and that the UK remains a competitive location for cutting-edge research.
HMRC introduced a mandatory random enquiry programme (MREP) for SMEs claiming under the SME scheme or RDEC to better understand levels of non-compliance. This involves taking a random sample of claims to more accurately estimate levels of non-compliance. Large Business customers claiming RDEC were not included in the MREP because the Customer Compliance Manager led co-operative compliance model in HMRC’s Large Business Directorate provides a strong insight into claims made.
The government also announced reforms in 2021, 2022 and 2023 which introduced a range of measures to reduce non-compliance. Some of these measures are already in place and having an impact.
Operational changes
Over the last 3 years, HMRC has more than doubled the number of people working on R&D compliance. This includes an extra 300 people tackling non-compliance. HMRC uses the full range of the department’s investigative and compliance techniques, including education work and large-scale one-to-many interventions as well as criminal investigation.
As part of increasing the people working on R&D compliance, in July 2022, a dedicated R&D Anti-Abuse Unit was created to tackle incorrect claims and open enquiries into the most complex cases. HMRC has countered criminal attacks on the R&D system involving fraudulent or hijacked businesses; blocking £85 million in fraudulent claims, challenging more than 2,500 suspected claims; and arresting 9 people.
HMRC has also introduced a range of additional measures, including payment identification and verification controls for all claimants. As a consequence of these additional protections, HMRC continues to aim to pay 85% of payable claims within 40 days.
Policy changes
In addition to increased resource for HMRC, the government has announced new policy measures to counter non-compliance. Some are already in place with others coming into effect from August 2023:
- requiring all claims to be made digitally – allowing HMRC to more effectively risk assess claims
- requiring each claim to be accompanied by additional information so HMRC can better identify and target higher-risk claims
- reducing the amount of payable relief in the SME scheme to £20,000 plus 300% of the company’s PAYE NICs liability – preventing offshore companies with little or no UK operations from artificially channelling activity through the UK in order to claim the relief
- requiring each claim to be supported by a named officer of the company to help prevent claims being submitted without the company’s knowledge or understanding
- requiring details of any agent associated with a claim so HMRC can move quickly where it has concern about potential agent misconduct
- limiting the ability of agents who facilitate spurious claims to do so for earlier years where a company has correctly not previously claimed the relief
- proactively reaching out to customers who are new to R&D regimes and to those in sectors where there are limited opportunities for businesses to make compliant claims
The SME scheme rate reduction, which came into effect from April 2023, is also expected to reduce levels of non-compliance. Historically, the generosity of the scheme has led to abuse, and we anticipate the reduction will lead to fewer fraudulent claims. This change was part of a wider rebalancing of the R&D tax reliefs at Autumn Statement 2022 to ensure taxpayers’ money is used as effectively as possible to support innovation.
The government recognises the value of R&D intensive SMEs to the UK’s wider innovation ecosystem, and the hugely important role that R&D and innovation play for the economy and society. Further support was announced at Spring Budget 2023 for the most R&D intensive loss-making SMEs. A company is considered R&D intensive where its qualifying R&D expenditure is worth 40% or more of its total expenditure.
These policy changes are necessary to protect taxpayers’ money and the integrity of the reliefs. They introduce further protections whilst seeking to balance the needs of compliant businesses. The government will continue to review and consider reform of these schemes, including publishing its response to a recent consultation on combining them.
2. HMRC’s compliance approach
HMRC’s compliance approach for the R&D tax reliefs is in line with its aim to help people get their tax right first time. This is done through education, improving HMRC systems, and stepping in with proportionate, targeted responses where tax is at risk of going unpaid.
In line with this, HMRC’s R&D compliance approach is to:
- help businesses get things right through better education and support, and by improving the process of making a claim
- take proportionate action where HMRC sees non-compliant claims, ranging from large scale interventions for less complex non-compliance through to conducting criminal investigations where HMRC identifies abuse
- work closely with the agent community to raise agent standards and improve HMRC communications, guidance and insight and take decisive action in relation to agents who abuse the relief
- improve HMRC’s insight into claims and use sophisticated risking to analyse a wide range of data and information
The analysis shows that the vast majority of non-compliance relates to SMEs rather than large businesses, so this document focuses on HMRC’s approach to that customer group and its overarching principles.
Our compliance principles are the same for large businesses and SMEs. However, the Large Business Directorate is responsible for around 2000 of the largest businesses in the UK. The Large Business Directorate assigns a Customer Compliance Manager to each of these businesses. The Customer Compliance Manager is supported by tax professional colleagues to ensure that businesses pay the correct amount of tax at the right time. The Large Business Directorate’s approach to R&D risk is consistent with this model to help mitigate the level of R&D compliance risk. This is reflected in the much lower estimate of error and fraud (non-compliance) amongst large businesses claiming RDEC.
2.1 Helping businesses get it right
HMRC’s R&D compliance approach is built on helping customers get it right first time and removing opportunities for non-compliance. HMRC calls this work ‘upstream’ compliance as it happens before a claim is made.
This is important for the R&D tax reliefs as the MREP data and insight from businesses, agents and representative bodies shows that a significant level of R&D non-compliance occurs due to error.
HMRC has already put in place a programme of educational activity to support customers via one-to-many campaigns, improved guidance and educational webinars. HMRC will continue to build on this activity, with new measures coming into force later this year that will allow the department to target this support more effectively.
HMRC’s efforts are focused on the areas of highest risk. This includes education campaigns for businesses most at risk of making incorrect claims. Campaigns are targeted at sectors where businesses are unlikely to be eligible for R&D but risk being approached by unscrupulous agents.
From August 2023, claimants will have to inform HMRC which agent was involved in producing their claim. This will enable HMRC to better target the appropriate activity on those agents who promote and submit non-compliant claims.
HMRC has already committed to making further improvements to its guidance and will publish examples of eligible and non-eligible claims. It will continue to work with a wide cross-section of businesses, industry groups, agents and accountancy professional bodies to iterate this guidance, making it easier for businesses to understand when a claim is likely to be viable and where it is not.
Alongside this general support, the government has introduced changes to address the specific challenge for first-time claimants, who are more likely to get things wrong than those who have claimed before.
As a result, from 1 April 2023, if a business is making a claim for the first time or after a long gap, they must notify HMRC of their intention to make an R&D claim within 6 months of the end of that accounting period.
This will help HMRC better support businesses in two ways: firstly, it will allow us to serve these first-time claimants clear guidance, and secondly, it will help protect businesses from unscrupulous agents who try to pressure them into making non-compliant historic claims.
HMRC will also use existing communication channels to promote uptake of the R&D Advance Assurance offer as part of its overall approach to give certainty and assure compliance with the regime.
2.2 Operational interventions
Where HMRC cannot design out non-compliance by preventing it during the claim process, or by promoting it through customer education, it carries out targeted interventions proportionate to the level of risk and the customer behaviour.
For instance, if HMRC sees similar mistakes made by large numbers of claimants, it will contact those customers and prompt them to correct the errors. This high-volume targeted activity is the most effective way to correct this non-compliance given the large number of claims received (nearly 90,000 received in 2020 to 2021).
Where HMRC identifies more complex non-compliance, its specialist staff will undertake more detailed examinations of the claims. HMRC’s new R&D Anti-Abuse Unit will take forward compliance activity where it suspects the customer has deliberately tried to abuse the relief. This sits alongside the work done by the highly-trained fraud specialists within HMRC’s Fraud Investigation Service who work on cases where HMRC suspects criminal intent.
From August 2023, claimants will be required to provide more detailed information when they claim. This will enhance HMRC’s ability to deliver targeted interventions and provide better data to inform future policy measures and upstream interventions.
Where HMRC identifies non-compliance, it will consider the individual facts of each case before deciding whether to charge a penalty, in line with the relevant legislation (Schedule 24 Finance Act 2007). Penalties will be reviewed as part of quality check procedures across the various types of interventions to ensure consistency of approach.
HMRC has – and will continue to – significantly increase the level of scrutiny of R&D claims through a range of interventions, identifying and stopping more error and fraud as a result.
In scaling up the activity, HMRC is focused on managing checks professionally and in line with the commitments set out in the HMRC Charter. It will continue to work with customers and stakeholders to ensure checks are carried out in a professional manner, as well as working with them to improve the quality of its communications, guidance, and make it easier to escalate issues to the appropriate technical specialists where there is complexity or dispute.
2.3 Working with agents
Agents play a vital role in the R&D tax reliefs regime and more than 90% of claimants are represented by one.
HMRC recognises that high-quality advice from agents can enable businesses to get their claims right, which is why it has sought to work with agents and professional bodies on R&D as part of a continuous two-way conversation.
Agents and professional bodies provide valuable insight into challenges with claiming and what they are seeing in the advisory market, while HMRC provides insight on upcoming changes, common errors and its operational approach.
Reputable, professional agents share HMRC’s goal of improving the quality of advice on R&D, and HMRC will continue to work with them to simplify the claims process, improve customer understanding, and drive out poor advice from the market.
However, the agent population is diverse, with a range of capability and intent, which is why HMRC takes a tailored approach, in line with its overall approach to agents.
Some agents seek to abuse the R&D reliefs: where HMRC sees this behaviour, decisive action will be taken in line with HMRC’s overall approach to agent misconduct.
HMRC always reviews allegations of misconduct, and takes firm action against agents that breach HMRC’s Standard for Agents, including issuing penalties, suspending claims or refusing to deal with an agent. HMRC also works with reputable agents and professional bodies to set standards.
2.4 Improving HMRC’s insight and risking
HMRC takes a risk-based approach to non-compliance, tailoring its approach according to the level of risk and the behaviour identified (which ranges from mistakes all the way through to deliberate fraud and criminal attacks).
HMRC risk assess all claims, from August 2023 there will be an increase in the amount of data it receives on individual claims, giving insight into the R&D activity, expenditure, agent behaviour, and business contacts. This will radically improve this risking process.
In addition to claim-specific data HMRC also builds qualitative insight. This is done by HMRC regularly seeking feedback from customers – whether formally through external customer research, via industry, representative body and agent meetings or customer complaints and compliance check exit surveys.
2.5 Next steps
HMRC will share a further update on this approach to improving compliance with R&D tax reliefs in winter 2023, as part of its formal response to the Public Accounts Committee on this issue and any further changes will be announced at a future fiscal event.
3. Analysis
3.1 Summary
2020 to 2021: Mandatory random enquiry programme
HMRC has recently completed new analysis to better understand the size and scope of non-compliance in the reliefs, based on the most detailed work that has ever been carried out on these reliefs.
HMRC’s new methodology for estimating the level of non-compliance in these reliefs is produced by using a mandatory random enquiry programme (MREP) for SME claims (both SME scheme and RDEC).
This methodology represents international best practice. Due to the time-limits for filing a Corporation Tax return and for taking up a compliance enquiry, there is a two-year time lag on the estimates produced by MREP.
As a consequence, many of the changes that the government has introduced in the last 3 years to reform the schemes, are not reflected in the latest estimate.
The updated estimate of the overall level of error and fraud for both reliefs for 2020 to 2021 is 16.7.% (£1.13 billion), which is significantly higher than the previously published estimate of 3.6% (£336 million) for 2020 to 2021.
The updated estimate for the 2020 to 2021 level of non-compliance in the SME scheme is 24.4% (£1.04 billion) and 3.6% (£90 million) for the RDEC scheme. Previously published estimates for 2020 to 2021 were 5.5% (£303 million) and 0.9% (£33 million) respectively.
The government is clear that this level of non-compliance within the R&D tax reliefs is unacceptable.
The MREP relates to claims made by small and medium-sized businesses in 2020 to 2021. A random sample of 500 claims received in 2020 to 2021 was selected for a full audit by compliance officers.
The MREP does not include claims made by large businesses in the RDEC scheme, for which we used a separate methodology to estimate levels of error and fraud based on historic claim data, compliance results and overall levels of non-compliance of Corporation Tax for large businesses.
The results presented in this section are based on 97% of cases in the MREP with a finalised compliance audit. The tables below are based on the MREP extrapolated to claims made by SMEs in 2020 to 2021 including RDEC claims.
Table 1: Levels of research and development expenditure and error and fraud (E&F): 2020 to 2021
| Expenditure £m | E&F £m | E&F - percentage of expenditure | |
|---|---|---|---|
| SME scheme | £4,250 | £1,040 | 24.4% |
| RDEC | £2,510 | £90 | 3.6% [Note] |
| Combined | £6,760 | £1,130 | 16.7% |
Note: The increase in the estimate of RDEC E&F relates to the increased levels of E&F identified in the SME claimant population
The estimates of non-compliance in R&D are significant and show that many customers make mistakes while applying, and others abuse the generosity of R&D tax reliefs.
Within HMRC’s Resource Accounts lower, middle and upper bound estimate ranges have been documented.
Reducing the level of non-compliance in the R&D tax reliefs is a priority for government. This new analysis shows the importance of previously announced measures and emphasises the need for continued focus.
2022 to 2023: Indicative impact of operational measures
For illustrative purposes, HMRC has considered the possible error and fraud position for 2022 to 2023 expenditure. Where there is a more robust evidence base for operational measures already introduced affecting expenditure in 2022 to 2023, HMRC’s best judgement is that the measures that will have taken effect for this period will reduce the level of error and fraud for the SME scheme by £250 million.
HMRC has been unable to quantify the impact of policy measures, particularly measures to mandate digital claims and require additional information, which will also impact claims relating to expenditure in 2022 to 2023. Taking account of the estimated level of expenditure in 2022 to 2023 (£7.9 billion excluding a final adjustment relating to 2017 to 2018), and the reductions in the error and fraud rate that HMRC has been able to quantify, this would suggest error and fraud of around £1.05 billion in total across the SME scheme and RDEC. When the full impacts of these changes are available, HMRC’s assessment is that the true level of error and fraud for expenditure in 2022 to 2023 will be lower than this.
3.2 Themes
HMRC’s analysis of the 2020 to 2021 MREP data has identified areas of risk, which can be grouped into 5 themes.
Theme 1: Customer behaviour
Analysis of the MREP shows that around half of all claims, by volume, contained at least some element of non-compliance. HMRC found fraud indicators in fewer than 10% of claims examined in the random enquiry programme and these claims accounted for less than 5% of the total value claimed. To be classified as fraud, a caseworker needs to have found evidence that the claimant deliberately set out to misrepresent their circumstances to get money to which they were not entitled.
This indicates that the majority of non-compliance is down to other behaviours. As with other regimes, the term ‘non-compliance’ or ‘error and fraud’ encapsulates this full range of behaviours, from mistakes and failure to take reasonable care through to deliberate non-compliance.
Analysis of the claims examined as part of the MREP shows that a quarter (25%) of claims were fully disallowed as no qualifying R&D activity took place, although HMRC had no specific indication that the claimants were attempting to commit fraud.
In 19% of cases, qualifying R&D activity was being undertaken, but businesses had overclaimed the relief. In these cases, some of the claim was agreed. Again, HMRC had no indication that these claimants were attempting to commit fraud.
In 2% of the cases, there was an attempt to make a genuine claim, but there was a technical misinterpretation of the R&D legislation.
Theme 2: Size of expenditure
Table 2: Analysis of claims received in 2020 to 2021 by size of expenditure on the SME research and development tax relief
| Claim by size of expenditure, £000’s | Number of claims received in 2020 to 2021 | Value of claims (£m) | Percentage of claims in MREP which are compliant | Percentage of claims in MREP wholly non-compliant | Percentage of claims in MREP partially non-compliant | Estimated value of non- compliance (£m) | Estimated percentage non-compliance, value of claims |
|---|---|---|---|---|---|---|---|
| 0-<10 | 8,300 | 30 | 47% | 27% | 27% | 20 | 78% |
| 10-<20 | 7,100 | 30 | 38% | 21% | 40% | 20 | 63% |
| 20-<30 | 6,400 | 40 | 37% | 29% | 34% | 30 | 65% |
| 30-<40 | 3,700 | 40 | 45% | 9% | 45% | 10 | 34% |
| 40-<50 | 3,700 | 40 | 64% | 9% | 27% | 10 | 38% |
| 50-<75 | 7,800 | 100 | 35% | 20% | 46% | 60 | 55% |
| 75-<100 | 8,500 | 160 | 42% | 12% | 46% | 70 | 44% |
| 100-<250 | 19,700 | 680 | 59% | 9% | 32% | 220 | 33% |
| 250-<500 | 9,200 | 690 | 52% | 13% | 35% | 210 | 30% |
| 500-<1,000 | 6,400 | 930 | 53% | 3% | 45% | 230 | 25% |
| 1,000+ | 3,900 | 1,870 | 74% | 9% | 17% | 240 | 13% |
| Total | 84,800 | 4,600 | 50% | 14% | 36% | 1,120 | 24% |
This analysis shows that the smaller the amount being claimed for, the more likely it was to be non-compliant.
In claims where expenditure was over £1 million, around 75% of claims were fully compliant. In smaller claims the percentage of claims being fully compliant was lower, at between 35% and 64%.
As the size of expenditure decreases, the value of non-compliance expressed as a percentage of the value of the claim increases. In the smallest claims where expenditure was less than £10,000, over 75% of the value of the claim was non-compliant.
Theme 3: Sectors
The sectoral analysis is based on analysis of Standard Industrial Classification codes (SIC). Information on SIC codes can be found at the following: Nature of business: Standard Industrial Classification (SIC) codes (companieshouse.gov.uk). The lowest levels of non-compliance (highest levels of compliance), expressed as a percentage of the value of claims, were in claims where the main trade classification is ‘professional, scientific and technical activities’ followed by manufacturing.
Table 3: Sectoral breakdown of claims received in 2020 to 2021 by SMEs
| Sector | Number of claims by SMEs in 2020-21 | Value of claims by SMEs (£m) | Percentage of claims which are compliant | Percentage of claims wholly non-compliant | Percentage of claims partially non-compliant | Value of non- compliance £m | % non-compliance, value of claims |
|---|---|---|---|---|---|---|---|
| Public administration and defence | 2,000 | 70 | 75% | 17% | 8% | 30 | 46% |
| Agriculture, Forestry and Fishing | 2,000 | 40 | 50% | 25% | 25% | 20 | 38% |
| Arts, entertainment and recreation | 1,400 | 40 | 38% | 13% | 50% | 30 | 61% |
| Construction | 7,600 | 260 | 38% | 18% | 44% | 110 | 40% |
| Education | 1,500 | 20 | 11% | 33% | 56% | 20 | 87% |
| Finance | 2,900 | 350 | 41% | 18% | 41% | 100 | 29% |
| Information and communication | 18,800 | 860 | 45% | 14% | 42% | 300 | 35% |
| Manufacturing | 18,500 | 820 | 69% | 6% | 25% | 140 | 17% |
| Other Services | 3,400 | 120 | 45% | 15% | 40% | 40 | 38% |
| Professional, scientific and technical activities | 15,900 | 1,510 | 49% | 17% | 34% | 130 | 9% |
| Wholesale and retail trade | 10,700 | 510 | 40% | 18% | 43% | 210 | 42% |
| All | 84,800 | 4,600 | 50% | 14% | 36% | 1,120 | 24% |
Theme 4: First time claimants
Table 4: Analysis of claims received in 2020 to 2021 by whether a company has previously made a claim for research and development tax credits or whether the company is making a claim for the first time
| Company claiming for the first time? | Number of claims in 2020-21 | Value of claims by SMEs (£m) | Percentage of claims which are compliant | Percentage of claims wholly non-compliant | Percentage of claims partially non-compliant | Value of non- compliance | % non-compliance, by value of claim |
|---|---|---|---|---|---|---|---|
| No | 62,700 | 4,010 | 52% | 13% | 35% | 900 | 22% |
| Yes | 22,000 | 590 | 43% | 19% | 38% | 220 | 38% |
| All | 84,800 | 4,600 | 50% | 14% | 36% | 1,120 | 24% |
Claims submitted by companies who had not previously submitted a claim had higher levels of non-compliance than where a claim had been made in previous years: 38% of the value of first-time claims was non-compliant, compared with 22% of where companies had previously made claims.
Theme 5: Use of agents when claiming research and development reliefs
For claims selected as part of the mandatory random enquiry programme, HMRC has assessed whether the company uses a specialist R&D agent. Tables 5 and 6 break down the size of claim by whether the company has been identified as having a specialist R&D agent. Overall, from our operational data, we know that over 90% of customers making R&D claims are represented by an agent.
Table 5: Breakdown of claims by companies with an R&D agent
| Claim : size of expenditure, £’000s | Percentage of claims with an R&D agent | Number of claims | Value of claims, £m | Value of non-compliance as a percentage of claim value |
|---|---|---|---|---|
| 0-<10 | 43% | 3,600 | 10 | 90% |
| 10-<20 | 57% | 4,100 | 20 | 67% |
| 20-<30 | 45% | 2,900 | 10 | 79% |
| 30-<50 | 64% | 4,700 | 50 | 33% |
| 50-<75 | 59% | 4,600 | 60 | 58% |
| 75-<100 | 46% | 3,900 | 70 | 37% |
| 100-<250 | 48% | 9,500 | 310 | 34% |
| 250-<500 | 59% | 5,400 | 410 | 31% |
| 500+ | 44% | 4,600 | 990 | 15% |
| Total | 51% | 43,200 | 1,920 | 25% |
Table 6: Breakdown of claims by companies without an identified R&D agent
| Claim : size of expenditure, £’000s | Percentage of claims without an identified R&D agent | Number of claims | Value of claims, £m | Value of non-compliance as a percentage of claim value |
|---|---|---|---|---|
| 0-<10 | 57% | 4,700 | 20 | 74% |
| 10-<20 | 43% | 3,100 | 10 | 56% |
| 20-<30 | 55% | 3,600 | 30 | 57% |
| 30-<50 | 36% | 2,700 | 30 | 41% |
| 50-<75 | 41% | 3,200 | 40 | 50% |
| 75-<100 | 54% | 4,600 | 90 | 49% |
| 100-<250 | 52% | 10,200 | 380 | 31% |
| 250-<500 | 41% | 3,700 | 280 | 28% |
| 500+ | 56% | 5,800 | 1,810 | 18% |
| Total | 49% | 41,500 | 2,680 | 24% |
Across all sizes of claims around half of companies have used a specialist R&D agent, although there is some variability. Claims over £500,000 account for around 60% of the value of claims, and around 12% of claims. Rates of non-compliance are the lowest in these largest claims whether a company has a R&D agent or not, with little difference in the non-compliance rates at 15% for those with a R&D agent and 18% for those without. Claims under £10,000 have the highest rates of non-compliance, at 90% for those with a R&D agent and around 75% for those without, although the value of claims is less than 1% of the total.
4. Conclusion
Reducing the level of non-compliance in R&D tax relief schemes is a priority for HMRC. HMRC will share a further update on this approach to improving compliance with R&D tax reliefs in winter 2023, as part of its formal response to the Public Accounts Committee on this issue, and will announce any further changes at a future fiscal event.