HMRC R&D Tax Credits Statistics 2022: Key Findings
What Do HMRC’s 2022 R&D Statistics Tell Us?
HM Revenue and Customs’ (HMRC’s) research and development (R&D) tax credits statistics for the financial year 2020–21 were released on 29 September 2022, presenting detailed information on the provisional estimated amount of R&D tax relief claimed across all sectors and regions during the tax year. The statistics offer some insight into how the financial year affected businesses’ ability to do R&D, with comparisons to previous statistics.
This year’s figures cover March 2020 until March 2021, a particularly interesting year as the UK went into full lockdown during this time, many businesses furloughed staff, and many R&D activities had to be paused.
Smaller Average Claim Sizes
There was a 10% decrease in the average value of claims in the year, likely because of the impact of the COVID-19 pandemic that prevented many companies from carrying out their normal levels of R&D activity.
£74,000 Average Claim
The average R&D tax relief claim was £74,000 compared to £82,000 in the 2019–20 financial year, which was released in the 2021 HMRC statistics report.
On Top: Information and Communication
The Information and Communication sector surpassed Manufacturing as the biggest claiming industry in the 2020–21 financial year, accounting for 21% of all claims.
Less R&D Expenditure
This corresponds to £38.1 billion of R&D expenditure, 11% lower than the previous year.
4% Less Relief Claimed
The total support claimed for the 2020–21 tax year was £6.6 billion, a decrease of 4% from the previous year. This is the first ever decrease in the total R&D tax relief claimed.
Higher Volume of Claims
The number of R&D claims increased by 7%, with the majority made by small and medium enterprises (SMEs).
Ryan’s Expert Opinion
“COVID-19 has no doubt had a big influence on the numbers. Businesses had no choice but to adapt and overcome, with many increasing their focus on new innovation to achieve this, identifying and quickly addressing new opportunities created by the changing landscape.
“The number of first-time claimants went down for the first time since 2010. I would assume there are two reasons for this. First, many more companies are aware of the relief, and second, some adverse press the R&D scheme received has turned off potential claimants.
“Also, the 20% increase in the number of SMEs claiming under the less generous R&D expenditure credit (RDEC) scheme could be caused by a greater number of SMEs seeking grants and subsidies as a form of COVID-19 support.”