Contents
As R&D tax consultants, we are keen to understand the value of R&D tax relief claims and the extent to which error and fraud are present within the field.
The release of HMRC’s 2025/26 Annual Report and Accounts provides an opportunity for reflection for accountants who provide R&D tax relief support and the innovative businesses that benefit from it.
We are examining the findings to determine what is currently working with the scheme and what changes may come as a result of any ongoing issues.
Are R&D tax reliefs still valuable?
One of the big questions that accountants helping clients with R&D tax relief claims are likely to hear is whether the process is valuable.
HMRC recorded £8 billion of expenditure on R&D tax reliefs during the 2025/26 period, up from £7.6 billion in 2024/25, and was able to process 89 per cent of payable credit claims within 40 days.
It has been noted that the cost of R&D tax reliefs has increased during this period.
While this is likely due to it being the first full year with the merged scheme and the ERIS scheme in effect, the increased expense may indicate that more businesses are getting value from R&D tax relief claims.
However, cash value alone does little to reveal the full impact of R&D tax relief claims.
The 2025/26 tax year saw the highest amount of tax collected by HMRC in history, along with rising inflation and increased operational costs.
As such, it is possible that a higher cash value for R&D tax reliefs may not fully correlate with an increase in their real-world value.
A greater indicator of the value of R&D tax relief claims is the extent to which they are free from error and fraud, as this demonstrates a greater understanding of the scheme and a better approach to submissions.
Are R&D tax relief claims more compliant than before?
HMRC’s 2025/26 Annual Report and Accounts contains only estimates regarding the levels of error and fraud in R&D tax relief claims, but it is still worth getting a sense of the general trajectory.
Using data from the Mandatory Random Enquiry Programme (MREP), HMRC has estimated that the current rate of error and fraud is 5.3 per cent, unchanged from the year before.
The value of error and fraud has increased slightly, going from £442 million in 2024/25 to £475 million in 2025/26.
While the ERIS scheme has an error and fraud rate of 11 per cent, the trend with the merged scheme is more interesting.
Error and fraud have increased from 3.1 per cent to 4.4 per cent, meaning that the value of these erroneous claims has jumped from £189 million to £344 million.
While it would be ideal to bring down the level of error and fraud in ERIS cases, it seems that HMRC is more concerned about getting more substantial claims under control.
This could explain the recent decision to pivot the focus away from general compliance and focus on more complex cases.
How will the figures impact R&D tax relief support for accountants?
The figures shown in the report are helpful for those wanting to understand how R&D tax relief claims are likely to work in the near future.
That HMRC has placed a focus on responsiveness is reassuring and the ongoing commitment to tackle error and fraud makes the scheme more reputable.
This allows accountants to have greater confidence in recommending the service to genuine innovators and working with an R&D tax consultant is often the best way to have this confidence.
It is important to note that HMRC has considered the history of the RDEC scheme alongside the merged scheme and, from this, it is apparent that the rate of error is higher even as R&D tax relief claims are generally more compliant.
Great care needs to be taken when utilising the merged scheme, as this is likely to be a focus of compliance checks in the current tax year to pull the rate of error and fraud back down.
Our expert team can review R&D tax relief claims and assist with any part of the process, from conducting scoping interviews with clients to submitting the final claim itself.
Should your work be subject to an enquiry, we can support the process to ensure that legitimate value is preserved.
Get in touch with our team for ongoing support with the future of R&D tax relief claims.
Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 years’ experience, he works closely with businesses to identify qualifying R&D activities and prepare clear, compliant claims. He combines technical expertise with a strong understanding of economics and finance to support successful outcomes. Adam also contributes to industry webinars and CPD sessions, sharing insights on R&D tax relief and HMRC requirements.
Sign up to our Newsletter
Stay ahead with the latest R&D tax insights, funding updates, and innovation trends — straight to your inbox.
