HMRC enquiries into R&D Claims

It is widely known that HMRC is tackling fraud in R&D claims and has significantly increased the number of claims being checked under enquiry. It is taking a harder line when it comes to approval of those claims.

It is widely known that HMRC is tackling fraud in R&D claims and has significantly increased the number of claims being checked under enquiry. It is taking a harder line when it comes to approval of those claims.

The intention is not to dissuade companies from innovating or from making claims. Still, it is looking to find claimants who are deliberately defrauding the government in their claims.

Choosing an Agent for Your R&D Tax Claim

With the recent increase in compliance checks by HMRC, businesses are facing heightened scrutiny when it comes to R&D tax claims. These checks are designed to ensure claims are accurate, legitimate, and aligned with HMRC guidelines. While this helps maintain the integrity of the system, it also highlights the importance of submitting claims that are both compliant and robust.

Partnering with a reputable firm for your R&D tax claim provides an invaluable level of confidence and security. Experienced professionals understand the complexities of the R&D tax credit system and are equipped to accurately identify qualifying activities and expenditures. They also maintain a thorough, well-documented approach, which is crucial in defending your claim during a compliance check.

Engaging with less experienced providers or taking a DIY approach may lead to errors, overlooked opportunities, or even non-compliance, potentially putting your business at risk of penalties or rejected claims. A reputable firm not only maximises your eligible claim but can also safeguard your business against HMRC challenges.

In an era of increasing compliance checks, the value of professional expertise cannot be overstated. By choosing a trusted firm, you are securing your claim and protecting your business.

HMRC’s New Disclosure Service

HMRC has introduced a new disclosure service to tackle the issue of overclaimed R&D tax relief. This allows taxpayers to come forward if their claim was not accurately made and they were ineligible for the relief.

The disclosure service is targeted at companies that have mistakenly overclaimed R&D relief but failed to amend their tax returns. It does not apply to cases of deliberate fraud. HMRC defines ineligible claims as those involving errors that were not reported or claims for activities that do not qualify for the relief.

The move follows a surge in investigations, with the tax under review doubling to £641 million in 2023. HMRC attributes some misuse to organised criminal activity, citing the generous nature of the R&D tax scheme as an attractive target.

By offering this disclosure service, HMRC aims to address non-compliance while maintaining incentives for innovation.

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