DSIT’s “The value of public R&D”, puts a spotlight on robust claim compliance: What innovative businesses need to know.

November 10, 2025

By Mohammed Siddique, Partner at Bonham & Brook 

On 30.10.25, the Department for Science, Innovation & Technology (DSIT) published its landmark report “The value of public R&D”, which quantifies for the first time with such clarity the returns to civil public R&D in the UK.  

 

The headline figure is striking: on average, £1 invested by the public sector into R&D delivers around £8 in net economic benefit to the UK over the long term.  

That finding has profound implications for UK businesses engaged in innovation, and for how professional advisers like us at Bonham & Brook support them. In this blog, we will dive into what the findings mean for innovative companies, highlighting the importance of compliance and proper process in claiming R&D tax relief.

 

What the report tells us 

  • The analysis shows that public investment in R&D supports not only productivity growth but also leverages private sector R&D. For instance, evidence from Oxford Economics (2020), estimates that every £1 of UK public R&D spending attracts around £2 of private sector R&D investment in the long run. 
  • Productivity evidence is strong: according to Frontier Economics (2024), public R&D investment yields an average rate of return of about 40%, six years after the investment. This represents an ongoing annual productivity boost rather than a one-off gain. 
  • The report emphasises the wider societal benefits: improvements in health, security, environment and quality of life, which are harder to monetise but real. The £8 figure is therefore in many respects conservative.  
  • Finally, there is a clear message about the need for rigorous evidence-based evaluation of R&D programmes – measuring not just direct outcomes but spill-over benefits, long-term impacts and economy-wide effects.  

 

Why this matters for businesses and R&D claims 

For companies investing in R&D, and for advisers helping them claim relief, these findings reinforce several key points: 

  • Innovation investment is clearly “worth it”: the public evidence indicates high returns for the economy, but also for the firms that innovate. That makes capturing reliefs part of a credible growth strategy, not just a tax after-thought. 
  • Evidence is paramount: Because public R&D is under scrutiny (both the investment & the return), businesses should ensure that their R&D tax relief claims are robust, well-documented and compliant with HMRC standards. 
  • Frame the narrative: The fact that spill-overs and private sector leverage are significant means that R&D claims need to reflect the full ecosystem context: It’s not enough to demonstrate internal R&D: companies should show how their work advances science or technology by adding new knowledge, enhancing existing solutions, or introducing an improved/different technological approach. Specialists like us can help with this.
  • Timing, structure & process, matter: The longer the lag between investment and benefit, the greater the importance of having a clean audit-trail and process in place. Strong contemporaneous evidence showing what was done, when, and why, helps ensure claims remain verifiable over time. 

 

In other words?

 

a) Higher stakes = higher scrutiny:
Because R&D delivers major economic returns, the government is committed to ensuring reliefs are only given where strictly eligible.

b) Non-compliance is a real risk:
HMRC has increased enquiries and checks, meaning poorly evidenced or loosely interpreted claims are far more likely to be challenged.

c) Evidence expectations are rising:
Technical justifications and cost breakdowns now need to be clearly documented and directly tied to the statutory R&D definition.

d) Businesses must be proactive, not reactive:
Businesses should track R&D activities and evidence throughout the year, rather than trying to “reconstruct” claims at year-end.

e) Strong compliance is now a strategic business advantage:
Well-prepared claims reduce audit risk, protect cash flow, maintaining access to reliefs in a tightening regime.

 

How Bonham & Brook delivers value 

At Bonham & Brook, we believe three aspects of our methodology are essential to deliver robust R&D tax relief claims – further highlighted in this new government report. 

1. Sector-specific expertise

  • Whether your company operates in software, advanced manufacturing, energy or construction, we have specialists who understand your sector’s technical and commercial dynamics (this is crucial because, as the report notes, returns vary by sector, type of R&D and stage of innovation).

 

2. Efficient, personable, end-to-end process

  • With the government emphasising evidence, spill-overs, long-term benefits and compliance, having a slick, robust process is more important than ever.                                     
  • Our process is designed to identify eligible R&D activity early, capture the costs correctly, compile the necessary documentation, and deliver the claim with minimal friction.
  • We also handle supporting compliance and audit queries where necessary, with over 95% success rate. 
  • We pride ourselves on being proactive, on-hand advisers: innovation relief is often complex and new to many businesses; we make it simple. 

 

3. HMRC-experienced compliance team        

  • With ex-HMRC personnel heading our compliance team, including Malcolm Henderson as Compliance Director, we bring deep insight into what the tax authority looks for, how they evaluate claims, and how best to structure audit-ready documentation.
  • That means our clients benefit from assurance and reduced risk: the same rigorous mindset that the government uses to evaluate R&D returns, is applied to your claim.

 

“Having been on the other side of the fence, I understand what HMRC expect and help clients stay one step ahead of their expectations.”

– Malcolm Henderson, Compliance Director

 

Thinking ahead: what companies should do now 

In light of the report, here are some practical steps for innovation-driven companies: 

  • Review your R&D pipeline and ensure you are capturing all eligible activity. It’s very common for businesses to under-claim.
  • Document clearly the scientific or technological uncertainties and advances in your R&D work.
  • Ensure you have audit-ready documentation: the claim should hold up to scrutiny by HMRC.
  • Consider the broader strategic innovation landscape: how does your R&D tie into productivity, private investment & spill-over benefits? Even if not directly required for the claim, this helps frame the business case. Strong narrative => Stronger claim. 
  • If you operate in a sector where innovation is emerging or evolving (e.g. software, energy-transition tech), seek the support of specialist advisors like us, who understand your industry and its specific R&D drivers. 
  • Don’t wait until the end of the year: early engagement helps maximise the opportunity, ensures processes are in place and reduces pressure. It’s also far better from an R&D capturing perspective, as real-time discussions make it easier to identify & evidence qualifying work as it happens. 

 

Closing thought 

The “£1 to £8” headline from the DSIT report is a powerful reminder: public investment in R&D delivers meaningful economic, environmental and societal returns. But for individual businesses, the opportunity only becomes real when innovation is claimed properly, comprehensively and with robust compliance.

At Bonham & Brook, we’re committed to supporting our clients in claiming with confidence. As I conclude: 

“Innovation drives progress; compliance secures it. In today’s landscape, the strength of an R&D claim lies in its transparency and its readiness to be tested. That is what gives our clients confidence, and that is what we deliver.”

– Mohammed Siddique, Partner, Bonham & Brook

If your business is actively innovating, our team is ready to support you. 

 

 

Mohammed Siddique

Partner

 

 

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