The UK experience with R&D claim quality (brief) | Research Credit Integrity Alliance

Key points

HMRC's random enquiries found around half of SME claims for 2021 to 2022 non-compliant in part or in full, and it estimated error and fraud across the reliefs at 17.6 percent.1
From 2023 new claimants must notify HMRC in advance, every claim needs an additional information form naming the responsible officer and all agents, and claims are made digitally.23
From April 2024 HMRC pays R&D tax credits to the company, not to agents, and a merged scheme replaced the earlier two.45
HMRC's revised estimate of error and fraud for 2023 to 2024 is 6.4 percent, and claims fell to an estimated 40,325 for 2024 to 2025.67
No UK form asks how an agent is paid, and HMRC states that it does not regulate tax agents.123

The problem HMRC measured

HMRC introduced a Mandatory Random Enquiry Programme because its understanding of non-compliance in the reliefs was, in its words, "incomplete".1 The second programme, on SME claims for 2021 to 2022, found that around half were non-compliant in part or in full and 30 percent were wholly non-compliant, meaning no qualifying R&D took place.1 Fraud indicators appeared in fewer than 10 percent of cases; HMRC said most non-compliance was due to other behaviours.1 HMRC estimated error and fraud at £1.3 billion, or 17.6 percent of £7.6 billion claimed, and 25.8 percent in the SME scheme.1 The Comptroller and Auditor General qualified his audit opinion on HMRC's accounts because of the level of error and fraud.8

What changed

Measure	Applies from
Cap linked to PAYE on SME claims	Accounting periods from April 20211
Advance claim notification for new or returning claimants	Accounting periods from 1 April 20232
Additional information form, named officer and all agents, digital claims	Claims from 8 August 20233
No new assignments of R&D tax credits	From 22 November 20234
R&D tax credits paid only to the company, with narrow exceptions	Claims from 1 April 20244
Merged RDEC at 20 percent and ERIS for loss-making R&D intensive SMEs	Accounting periods from 1 April 20245

A claim without a required notification or additional information form is invalid.23 HMRC says it is not acceptable to answer the form by referring to an outside document, and that incomplete answers make an enquiry more likely.3 It said routing payment to the company would reduce "the financial incentive for agents to overstate claims", noting that more than 90 percent of claims showing markers of fraud used nominee bank accounts.1

HMRC also raised its R&D compliance staff from around 100 in 2020 to 2021 to more than 500, and opened checks on 17 percent of claims in 2023 to 2024.1 For advisers, it set up a professional bodies mailbox, an agent education model, and a route to report poor R&D service standards; it now requires paid advisers to register; and since 1 April 2026 it can penalize advisers for sanctionable conduct.191011

What has happened since

Claims fell from 83,240 for 2021 to 2022 to 65,690 for 2022 to 2023, and to an estimated 40,325 for 2024 to 2025.17 HMRC believes "a key driver" is the continuing impact of the additional information form.7 Total relief claimed for 2024 to 2025 is provisionally £8.2 billion, 5 percent more than the year before.7

HMRC's revised estimate of error and fraud for 2023 to 2024 is 6.4 percent overall and 11.1 percent for the SME scheme, and its illustrative estimates for the next two years are 5.3 percent overall.6 It attributes the fall to legislative and operational changes, "notably the mandation of digital claims and additional information requirements introduced in 2023".6 The Comptroller and Auditor General still qualified his 2025 to 2026 opinion, said the rate "has nearly halved since 2022-23", and described the 11.1 percent SME estimate as "amongst the highest reported across all government spending programmes".12

Agents in HMRC's data

More than 90 percent of claimants have an agent.1 In the second random enquiry programme about half of companies used a specialist R&D agent, and non-compliance by value was 28 percent for those claims against 21 percent for others, which HMRC described as "slightly higher".1 HMRC has warned companies about agents offering speculative claims "in return for high commission", and says that some agents give poor or incorrect advice.1 Its data do not show how any agent was paid.

What the record shows

The UK measured non-compliance first and then changed the claim process: more information, named individuals, notification in advance, and payment to the company. Claim numbers and estimated error and fraud fell after these changes, and HMRC and the National Audit Office connect the fall mainly to the 2023 information requirements.612 Several measures took effect together, and the most recent estimates are illustrative.6

The UK identifies every agent on a claim but does not collect their fees.23 No statutory rule on the basis of agents' fees was identified, and HMRC states that it "does not regulate tax agents including those who advise on R&D claims".1 The UK record therefore shows the effect of disclosure, process and payment measures, not of any rule on how agents are paid.

References

HM Revenue and Customs, Approach to Research and Development tax reliefs 2023 to 2024 (published 30 October 2024), sections 1.1, 1.2, 2.1, 2.3, 2.4 and 2.5, and Annex B. https://www.gov.uk/government/publications/hmrcs-approach-to-research-and-development-tax-reliefs-2023-to-2024/approach-to-research-and-development-tax-reliefs-2023-to-2024 (accessed 11 October 2026). Back
HM Revenue and Customs, Tell HMRC you want to claim Research and Development (R&D) tax relief (last updated 31 October 2024). https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief (accessed 11 October 2026). Back
HM Revenue and Customs, Corporate Intangibles Research and Development Manual, CIRD182000, "R&D Tax Reliefs: reformed reliefs: claims process: additional information form", sections "Statutory framework", "What information is required" and "Failure to provide complete or proper responses". https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird182000 (accessed 11 October 2026). Back
HM Revenue and Customs, Corporate Intangibles Research and Development Manual, CIRD81805 (updated 25 August 2026), sections on CTA09/S1142D and S1142C. https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird81805 (accessed 11 October 2026). Back
HM Revenue and Customs, Research and Development (R&D) tax relief: the merged R&D expenditure credit scheme and enhanced R&D intensive support (last updated 8 January 2026). https://www.gov.uk/guidance/research-and-development-rd-tax-relief-the-merged-scheme-and-enhanced-rd-intensive-support (accessed 11 October 2026). Back
HM Revenue and Customs, Annual Report and Accounts 2025 to 2026 (July 2026), page 107 and Resource Accounts note 3.1.4 (pages 251 to 252). https://assets.publishing.service.gov.uk/media/6a4f66c406e7256c331df8a2/HMRC_annual_report_and_accounts_2025_to_2026.pdf (accessed 11 October 2026). Back
HM Revenue and Customs, Research and Development Tax Credits Statistics: September 2026 (updated 29 September 2026), sections 1 and 4. https://www.gov.uk/government/statistics/corporate-tax-research-and-development-tax-credit/research-and-development-tax-credits-statistics-september-2026 (accessed 11 October 2026). Back
National Audit Office, Report by the Comptroller and Auditor General: HM Revenue & Customs 2023-24 Accounts, paragraph 2.9. https://assets.publishing.service.gov.uk/media/6889f286048fff613a4d5b72/Report_by_the_Comptroller_and_Auditor_General.pdf (accessed 11 October 2026). Back
HM Revenue and Customs, Reporting poor R&D tax relief service standards (published 26 September 2025). https://www.gov.uk/guidance/reporting-poor-rd-tax-relief-service-standards (accessed 11 October 2026). Back
HM Revenue and Customs, Check if and when you need to register as a tax adviser with HMRC (last updated 3 September 2026), section "Who needs to register". https://www.gov.uk/guidance/check-if-and-when-you-need-to-register-as-a-tax-adviser-with-hmrc (accessed 11 October 2026). Back
HM Revenue and Customs, Compliance Handbook, CH176100 and CH176140, "Sanctionable conduct by tax advisers". https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch176100 (accessed 11 October 2026). Back
National Audit Office, Report by the Comptroller and Auditor General on HM Revenue and Customs 2025-26 Accounts, published within HMRC's Annual Report and Accounts 2025 to 2026, Summary paragraph 11 and paragraph 2.8. https://assets.publishing.service.gov.uk/media/6a4f66c406e7256c331df8a2/HMRC_annual_report_and_accounts_2025_to_2026.pdf (accessed 11 October 2026). Back