2022 HMRC R&D Tax Relief Statistics

2022 HMRC R&D Tax Credit Statistics Released

HM Revenue and Customs (HMRC) have recently released their latest R&D Tax Credits National Statistics Report, providing valuable information about Research and Development (R&D) Tax Credits, their cost, and the nature of the companies claiming them. The report, published each year, covers the accounting period up to the year ending March 2021. 

R&D Tax Credit Statistics: Key Findings 2020-2021

1. For the first time since 2000, the value of R&D tax credit claims drop

Headline figures from the report show that for the first time since the scheme was introduced the total value of relief awarded to businesses claiming research and development (R&D) tax credits has fallen. The estimated amount of total R&D tax relief support claimed for the tax year 2020-2021 was £6.6 billion, a decrease of 4% from the previous year. This corresponds to £38.1 billion of R&D expenditure, which is 11% lower than the previous year. 

Whilst HMRC give little indication as to the reason for the decrease, the accounting period in question covers the beginning of the COVID-19 pandemic. As such, the decrease could likely be attributed to the impact that the pandemic had on investment in innovation during this time.

On a positive note, the number of businesses claiming R&D tax credits rose again to 89,300, an increase of 7% from the previous year. The increase is primarily driven by a 7% rise in the number of SME claims to 78,825. The figures show, that despite challenging times with the pandemic, innovation continues to be key to the success of UK businesses.

Claims for the tax year 2020-2021 can still be submitted past the cut-off date for the 2022 HMRC statistics publication.

The statistics published here for 2020-21 are therefore provisional and have been uplifted to include estimates for claims not yet received. Revisions are expected in next year’s publication.

2. Three industry sectors continue to dominate

There is once again a concentration in the number of UK claims in the ‘Manufacturing’, ‘Professional, Scientific and Technical’, and ‘Information and Communication’ sectors which account for 62% of the total number of claims and 70% of the total amount claimed in 2020-2021.

As expected these sectors continue to dominate due to R&D being at the heart of what they do. However, of the three sectors only the Information and Communication sector saw an increase in number of claims from the previous year – 20% to 22%. Both the Manufacturing sector and Professional, Scientific and Technical sectors saw a decrease in the number of claims. The data suggests that sectors such as Information and Communication more easily adapted to the changes in working conditions necessitated by the COVID-19 pandemic. This contrasts with the challenges experienced in industries such as scientific, manufacturing and construction including site shutdowns, social distancing and supply chain disruption.

We can also see from the report that despite a dominance from the three sectors, other sectors that are not traditionally associated with R&D activities continue to grow. Agriculture, construction, electricity, water & sewerage and transport & storage have all seen growth in the number of claims submitted from 2019-2020 to 2020-2021.

Number of R&D tax credit Claims by industry sector, 2020-2021

3. RDEC claims dominated by SME’s

The report shows a total of 10,475 Research and Development Expenditure Credit (RDEC) scheme claims for 2020-21, an increase in 7% from the previous year.

Of the 10,475 claims, 3,990 are from large companies and 6,485 are from SMEs claiming under the RDEC scheme because they are undertaking the R&D as subcontractors, or the R&D is subsidised, and so they are unable to claim under the SME scheme.

Perhaps surprisingly, given that the RDEC scheme was introduced as an incentive for ‘large companies’, the driving factor of the overall increase has been a result of more SMEs making claims. SME companies claiming under the RDEC scheme represents a 20% growth. In contrast, there was a 9% decrease from large companies claiming.

The decrease in total R&D expenditure from the previous year is also largely driven by a decrease in expenditure from companies claiming through the RDEC scheme. This could be due to several factors, most obviously the impact of the COVID-19 pandemic.

4. Claims are concentrated in London and the South East of England

R&D claims are once again concentrated in companies with a registered office in London, the South East or the East of England. London and the South East account for 36% of the number of claims and nearly half (49%) of the total amount claimed in 2020-2021.

The East of England has the third largest amount claimed at 12% of the total, but is fourth based on the number of claims just behind the North West. Wales and Northern Ireland have the lowest total number of claims.

The proportions of claims and amount claimed by region are almost identical to those seen in recent years.

However, an important point to note is that the regional split is based on the registered head office location so may not be where all the R&D activity takes place.

How do R&D tax credits differ by region?

Hover over our interactive map to discover the number of claims and total value of claims in your region, and how this compares with the rest of the UK.


Number of Claims = 4625

Value of Claims = £295 Million

Northern Ireland

Number of Claims = 2540

Value of Claims = £135 Million

North West

Number of Claims = 9390

Value of Claims = £480 Million

North East

Number of Claims = 2900

Value of Claims = £125 Million

Yorkshire & the Humber

Number of Claims = 6650

Value of Claims = £290 Million

East Midlands

Number of Claims = 6050

Value of Claims = £330 Million

West Midlands

Number of Claims = 7530

Value of Claims = £430 Million


Number of Claims = 2720

Value of Claims = £130 Million

South West

Number of Claims = 6920

Value of Claims = £330 Million

South East

Number of Claims = 13013

Value of Claims = £1.2 Billion


Number of Claims = 18785

Value of Claims = £2.08 Billion

Eastern England

Number of Claims = 8340

Value of Claims = £770 Million

5. First alignment between ONS and HMRC stats

The Office for National Statistics (ONS) publishes several additional National Statistics on R&D in the UK, including the Business Expenditure on Research and Development (BERD) survey. Previous releases have identified discrepancies between HMRC and ONS estimates of R&D expenditure, which has made it hard to compare the two. ONS has historically posted a lower estimate of R&D expenditure compared to HMRC statistics – figures for 2019/20 showed a £16.8 billion difference!!

This year, in an effort to improve cross publication coherence, HMRC and ONS have collaborated to compare the estimates, publishing a joint article describing how to interpret both sources: ONS-HMRC article.

Comments from our Director Matthew Thomson

“It is not surprising to see the first decrease in the total value of R&D relief given the challenges businesses faced during the early stages of the COVID-19 pandemic. It is encouraging however, to see that a large number of businesses continued to innovate and claim R&D relief during this time. It is possible that we will see a further decrease in the value of R&D relief in the next few years due to the ongoing COVID-19 impact, other economic conditions, and increased HMRC scrutiny of R&D tax credit claims. However, it’s important to remember that the government has a target to raise investment in R&D to 2.4% of UK GDP by 2027 and R&D tax relief forms part of that goal by reducing the cost of innovation for UK companies. HMRC have announced future changes to the scheme for example including new qualifying costs for data and cloud computing , in April 2023. This means businesses will be able to claim a larger deduction for expenses.”

To date over £47.6bn in tax relief has been claimed through R&D Tax Relief

As R&D tax credit specialists, Libcus can support your business with its R&D claim. Contact us today to find out more.