Is now the time to review your R&D claims?

30 September 2022


Tax Investigations,

Tax Reliefs including R&D

As HMRC continues to clamp down on Research and Development tax relief (R&D) claims, and ahead of the upcoming changes to the scheme, now could be the perfect time to review your claims.

Research and Development Tax Relief (R&D) has been a real focal-point of discussion within the business community over the last few years. And it’s hardly surprising when considering the value of the relief, the number of fraudulent cases cropping up, as well as the changes which will be coming into play as of 1 April 2023.

With more stringent rules being enforced and the value of the relief playing a vital role for businesses during this period of economic uncertainty, now is the perfect time to review your claim.

How will your claim be affected?

HMRC noted that claims which are deemed to have fallen short of their statutory definition of R&D and the BEIS guidelines will be issued with strict penalties, which could have a knock on effect when it comes to your claim. This could include

Increased turnaround time - Because of HMRC’s increased level of due diligence, the claim processing time has increased from 28 days to upwards of 40, meaning it will take longer to receive the benefit of your claim.

More details required - In order to tackle R&D fraud, HMRC’s compliance efforts have been strengthened through the recruitment of 100 new inspectors, who are solely tasked with addressing malpractice and fraudulent claims.

This has already resulted in a hike in the number of enquiries being carried out by compliance teams and it’s worth noting that HMRC are looking into retrospective as well as current claims. So, it’s crucial to make sure you take a holistic approach and ensure as much detail as possible is included when submitting your claim to avoid an enquiry.

How can I take action?

A reliable first port of call when reviewing your claims, is to consult the BEIS guidelines and HMRC’s definition of R&D. But without technical tax knowledge it’s easy to incorrectly assess the eligibility criteria and analysis of expenditure could be inaccurate – potentially leading to a lengthy enquiry.

With this in mind, we would always recommend seeking tax advice from a trusted professional ahead of submission.

Finding the right advisor

A comprehensive claim review conducted by a professional advisor will take the technical documents you have used to back up your claim into account, and will delve into the evidence you have used to demonstrate your qualifying research and development.

They will be able to conduct an in-depth review of your claims, focusing in on everything from the projects you’ve worked on and assessing any expenditure relating to your claim, to the methodology behind your qualifying R&D costs.

Our specialist incentives and reliefs team are built up of qualified advisors, industry experts and ex-HMRC inspectors, meaning they are more than well-equipped to review your claim.

As the complexity of the claim process continues to increase, they are on hand to conduct a free, no obligation review of your current and past R&D claims, to reveal any points of concern and help to prevent any possible penalties from HMRC further down the line.