Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make an estimate of the cost to the public purse of processing R&D tax relief (a) applications, (b) rejections and (c) appeals in each year since 2015.

In October 2024, HMRC released operational data in the Approach to Research & Development Tax Reliefs 2023-2024 publication. This includes data from 2022-2023 and 2023-2024 on the number of R&D enquiries, the proportion of claims requiring adjustment and data on appeals. This publication represents the most comprehensive data on R&D compliance activity and is not available for previous years.

This publication also included customer service data on processing times and the average time to complete a compliance check. HMRC processed 92% of claims within 40 days in 2023-2024. Processing means paying the claim, making contact to request further information, or refusing the claim, and, for claims identified as high-risk, starting an appropriately targeted compliance check.

The table below provides final and illustrative estimates of the cost of error and fraud in the R&D tax reliefs since 2020-2021.

The Mandatory Random Enquiry Programme approach introduced for small and medium sized enterprises represents good practice in the measurement of error and fraud, and involves a detailed inspection of a representative sample of claims filed. These estimates are published in HMRC Annual reports and Accounts and previous reports can be found at gov.uk at: HMRC’s Annual reports and Accounts.