Be prepared for HMRC checks on your R&D tax relief claims
If you’re a taxpayer making an R&D tax relief claim, it’s crucial to be ready for a possible HMRC compliance check. While these checks were once rare and typically linked to obvious errors in claims, HMRC’s new approach focuses on volume to tackle fraud and error, making compliance checks more common.
Even if you provide strong supporting evidence and detailed, accurate cost schedules, there remains a significant risk of a compliance check.
Recently, HMRC has increasingly been using its authority under Finance Act 1998 Schedule 18, paragraph 16, to reject R&D claims without initiating a compliance check. They simply amend the CT600 corporation tax return to remove the R&D claim. Although you can reinstate your claim by rejecting the amendment, doing so will likely trigger a compliance check.
We are experts in these practices and can help you prepare accordingly so you can navigate the complexities of claiming R&D tax relief. Even if you have had pre-existing claims, it is worth reaching out to discuss as we evaluate each claim on a case-by-case basis to ensure best practice and to prevent any potential challenges from HMRC.
You can read more on what R&D tax relief entails by clicking the following link: What is research and development tax relief? (hillierhopkins.co.uk)
If you are currently a client of Hillier Hopkins and you are making R&D claims, we strongly recommend you have Tax Investigation Service in place to protect you against the professional fees that would arise in the event of an enquiry. Follow this link to find out more: Tax Investigation Service – Hillier Hopkins
