An R&D tax investigation refers to HMRC contacting you after you have made an R&D claim, requesting more information. An enquiry from HMRC will usually be sent to you in the form of a letter.
Companies eligible for R&D tax relief will continue to face scrutiny in their claims unless they ensure that they have obtained appropriate advice from an advisor on the mechanics of the scheme and its application to their own business.
An enquiry from HMRC can be triggered due to various reasons – one of those being due to omissions in your R&D claim. This will usually look like a lack of supporting documents to identify a company’s qualifying R&D activity.
Enquiries can be made into a claim that has been submitted for the first time, as well in the case of subsequent claims having been made. There is no formal approval process by HMRC, so where a company has received repayment for a previous year’s R&D claim, it does not necessarily equate to approval. It may just mean that HMRC has not reviewed the claim in any detail at that stage.
Our team of R&D specialists has vast experience in dealing with R&D enquiries and has worked alongside many clients in getting their enquiries resolved.
If you have submitted an R&D claim and have received an enquiry from HMRC, our team of R&D specialists can resolve this for you, even if we have not been involved in the submission of the claim.
The process of dealing with an HMRC enquiry can be time-consuming and may take a while to conclude. However, we always do our best to process enquiries as efficiently as possible, with a view to expediting the completion of the enquiry.
We have included a case study of an R&D tax investigation which we had successfully resolved.
HMRC opened a tax investigation into the client’s accounting periods ending 30 September 2018 and 2019 and requested more information on the specific details of the claims as well as whether or not all the costs fell into the qualifying categories of R&D costs. They also raised concerns regarding the qualifications and experience of the competent professionals at the client’s company.
Due to the success of our work, we were not required to make any amendments to the 2018 return. Moreover, the corporation tax return for the 2019 period was only slightly ammended.
We resolved this investigation through effective communication with HMRC.
In conclusion, we were able to secure the client a total cash repayment of £45,283.54 once the investigation was resolved.
Partner - Corporate and R&D Tax
Corporate and R&D Tax Director
R&D Tax Manager