2.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2023 2.2 HMRC is carrying out further analysis to understand the reasons for the growing cost of Research & Development (R&D) tax relief, including sectoral analysis of the number and average value of claims. HMRC are working closely with the Office for National Statistics (ONS) to better understand why R&D expenditure derived from Corporation Tax returns and that produced by the ONS’s Business Enterprise Research and Development Survey are different, which may provide further insight into recent trends in R&D expenditure. 2.3 HMRC’s current estimate of the level of R&D error and fraud is 3.6% (£311 million) of the total expenditure cost. HMRC's R&D Mandatory Random Enquiry Programme (MREP) will provide a more robust estimate and will further enhance its understanding of the cost drivers for the relief.