In response to high levels of error and fraud, the Research and Development (R&D) tax relief scheme has been significantly reshaped since 2023, with HMRC risk assessments now being much sharper.
In our latest blog, the Clayton & Brewill team discuss what’s new in R&D tax claims and how errors will be dealt with moving forward.
Claimant support
To ensure companies fully understand R&D tax rules, HMRC has started to randomly email claimant companies on receipt of the R&D Claim Notification Form (AIF). This email will be a ‘guidance package’, with links to online guidance or other HMRC information sources inside. HMRC advises that there is no need to respond to these emails or take any action as a result of them.
These guidance packages will ensure companies are aware that an R&D claim is being made in their name, as there have been instances of fraudulent R&D claims being submitted without the knowledge of the company involved.
Frequent R&D claim errors
A recurrent theme in HMRC compliance activity is the number of incorrect and spurious R&D claims submitted by rogue firms in the past. This is something that sometimes only comes to light when a company changes its professional adviser.
To address the position where past inaccuracies in an R&D claim emerge, HMRC now has an online disclosure facility, allowing companies to report historic inaccuracies, and to upload relevant calculations. There is also a letter of offer that can be submitted to HMRC as part of a contract settlement.
The use of this online facility is appropriate when:
- The company is out of time to amend to Corporation Tax return
- Too much R&D tax relief has been claimed
- There is a need to pay Corporation Tax or repay overclaimed tax credits for R&D relief
- The incorrect claim did not arise from deliberate behaviour
Using the disclosure facility should usually qualify as making an unprompted disclosure to HMRC, and this in turn should lessen any penalty involved.
Keeping up to date
R&D tax relief is a specialist area, and keeping up with the rules is often confusing and demanding. At Clayton & Brewill we are always on hand to support. Contact us today to find out more.
