How HMRC approach an R&D Tax Relief Claim

MSC R&D Paid-on-Results; Fast-Track Process; Expert Teams


How HMRC Approach an R&D Tax Relief

While the very large companies are dealt with separately, most R&D claimants will have their claim dealt with by a specialist HMRC R&D office.

Initially the tax return containing the claim will be entered onto the HMRC systems by a large clerical team dealing with returns in general

The system will note that there is an R&D claim and will refer it to a specialist office. This is staffed by tax people rather than technologists, but they are familiar with dealing with R&D claims and will try to be broadly consistent with other R&D offices, and constructive   and helpful in their approach. They do not always succeed in this latter aim (we are all human and they are working under tight resource pressure) but this is the framework they seek to work within.
Although most enquiries into claims are based on risk features identified in the claims, some claims may be selected randomly for enquiry at this stage, to check that the targeted selection process is not missing something.

Within the R&D office, the claim will be initially reviewed to see if it is broadly in the right format and does not contain obvious errors. Depending on the scale of the claim and the degree of risk of error that HMRC sees, it will either be accepted at this stage or referred for more detailed enquiry.


HMRC R&D Enquiry

An HMRC enquiry is something to avoid if possible.  It requires the company to persuade unqualified HMRC staff that there is a technological advance required and can take a few months to resolve, possibly including site visits and detailed invoice review.  The claim may be adjusted as a result of the enquiry, and if there are obvious errors in what is claimed, there may be penalties.

We want to help clients avoid enquiries while fully claiming their entitlement. So our aim at MSC R&D is to structure the claim so that HMRC can quickly see that the claim is prepared in accordance with the rule base, and that the R&D has been correctly identified by specialists in the technology field.. In that way we aim to secure quick agreement of the claim and get you the benefit straight away.  Also, by involving us, you can demonstrate to HMRC that you have tried doing things conscientiously, and in the event of any challenge we will be there to smooth the way and support you.