R&D Tax Credits: is the 20% HMRC enquiry rate still accurate?

How HMRC is selecting R&D Tax Credit claims for enquiry in 2026

What’s actually changing:

• HMRC enquiry volumes appear to be falling, but the R&D claims being reviewed are larger and more complex.
• The widely quoted 20% enquiry rate no longer reflects how many HMRC enquiries are currently being opened.
• HMRC is moving away from campaign-style enquiries towards more targeted reviews based on perceived risk within individual claims.
• Enquiries may become less frequent, but are likely to involve more detailed questioning where HMRC focuses on costs, methodologies and supporting evidence.

Many R&D Tax Credit advisors still maintain that around 20% of all R&D claims are subject to an HMRC enquiry, even though this no longer appears to reflect the reality on the ground.

It is also not uncommon to see advisor marketing that contrasts a “20% enquiry rate” with a much lower figure at a particular advisory firm. This is presented as evidence that their own claims are of a superior quality and therefore less likely to be challenged by HMRC.

I have even heard suggestions from Big 4 accountancy sales staff that their enquiry rates are “practically zero”, based on the idea that they benefit from some kind of special relationship with HMRC under which their claims are unlikely to be challenged.

While some of this can be put down to marketing getting out of hand, it does need pointing out that the 20% figure is never linked to a clear timeframe and that enquiry rates for individual advisors are influenced by factors such as client mix and claim size.

As a result, the comparison gives limited insight into how HMRC is actually selecting claims for enquiry.

HMRC has also indicated that its approach to enquiries is changing, which suggests the 20% enquiry rate may no longer describe how enquiries are currently being opened.

Why the 20% enquiry figure became so widely used

From around 2022, HMRC increasingly adopted a “campaign-driven” enquiry model, with large volumes of R&D claims opened for compliance checks based on broad risk criteria.

Many of these enquiries followed similar lines, often involving cut-and-paste information requests and, in many cases, ignoring the detail already provided by claimants in the Additional Information Form (AIF) and supporting reports.

HMRC’s more assertive compliance approach was driven by legitimate concerns around error and fraud in the SME scheme and resulted in a sustained period where enquiry activity was both highly visible and difficult to predict.

Most R&D advisory firms began to highlight their compliance capability as a core selling point, which reinforced the perception of a persistently high enquiry rate across the market.

This quickly became embedded in both marketing and client expectations.

These concerns were a genuine response to a period of intensive and highly visible HMRC compliance activity but HMRC now appears to be taking a more targeted approach.

What HMRC is now saying

Recent commentary from HMRC, including in the R&D Communication Forum, points to a change in emphasis rather than a reduction in overall activity.

The most significant change is a move away from broad campaign activity. The HMRC teams responsible for the earlier campaigns are no longer opening new cases, with compliance work being merged into core enquiry teams. HMRC has indicated that this transition will become more apparent in 2026.

The underlying claim mix is also changing. HMRC is receiving fewer claims overall, but the total value of claims is increasing, so the average R&D claim is now larger.

HMRC has stated that it will focus more closely on higher-value and more complex claims, supported by greater use of specialist expertise. Enquiries are expected to be more detailed where they are opened.

HMRC has also said that enquiries will be handled by a single caseworker, rather than being split across different teams as they were under the earlier campaigns. This should lead to more consistent handling and clearer responsibility.

HMRC has also acknowledged problems with communication, particularly around emails and slow responses. Changes are expected from April, with more direct contact between caseworkers and agents.

HMRC is carrying out roughly the same level of compliance work, but focusing it on a smaller number of higher-risk claims.

What this means in practice

For claimants, a lower likelihood of being selected at random does not equate to a lower level of scrutiny.

Where enquiries are opened, they are more likely to focus on larger claims and areas of genuine technical or evidential risk, leading to more detailed questioning, particularly where cost methodologies or apportionments are concerned.

For advisors, being selected for an enquiry may now mean something different. Under the campaign model, an enquiry could simply reflect broad categorisation rather than a specific concern. Under a more targeted approach, it may indicate that HMRC has identified a particular risk within the claim, which means supporting documentation and technical justification will need to be stronger.

More attention is likely to be given to explaining assumptions and showing how costs have been calculated, particularly where that work has not been done properly.

HMRC is focusing on larger claims and those it considers higher risk or more complex, rather than trying to review large volumes of claims.

What advisors are seeing

Paul Rosser, an experienced R&D advisor who works closely with companies dealing with ongoing compliance checks, described a mixed picture:

“Some of the recent compliance checks we’ve dealt with have been handled well [by HMRC].

“The questions were sensible, clearly linked to the project, and it didn’t feel like a blanket rejection from the outset.”

He also noted that this is not yet consistent:

“As teams move across into the new structure, we’re still seeing enquiries where large volumes of questions are asked without clear engagement with the technical report.”

“There’s a risk that some of the behaviours from the previous campaign-style approach are simply being carried over into the new model.”

Jonathon Yeomans, former HMRC Tax Inspector and now R&D Compliance Director at Avalon Tax, told me:

“R&D enquiry numbers have come down from their 2023 and 2024 levels, but this is not a return to the old world. The current enquiry flow is smaller but still steady and appears much more targeted. It also remains significantly above pre-2022 levels.”

He also highlighted a change in the focus of enquiries:

“HMRC appears to be moving from volume to precision. We are seeing fewer challenges on whether something qualifies as R&D in principle, and more focus on whether the costs have been methodically calculated and can be robustly defended. That seems entirely reasonable.”

“Any advisors who relied on volume, or who did not properly test and evidence the basis of claim costs and apportionments, will find that model increasingly difficult to defend.”

These observations align with HMRC’s view that enquiries are becoming more targeted. They do not suggest a softer approach. The scrutiny may be narrower in scope, but it is more concentrated where it is applied.

A note on process and control

A recent Freedom of Information response obtained by Avalon Tax, and not previously reported, provides insight into how HMRC has been using AI tools in its compliance work.

HMRC confirmed that access to public AI tools such as ChatGPT, Gemini and Claude was only blocked from April 2025.

Prior to that point, those tools were not formally restricted. HMRC also confirmed that it is now using Microsoft Copilot within a controlled environment to support tasks such as summarising information, with decisions remaining the responsibility of human caseworkers.

The April 2025 timing suggests that, for a period, caseworkers may have had access to public AI tools without the controls now in place. A number of advisors have reported seeing signs of AI-generated content in enquiries during that time, which raises questions about how that use was monitored.

This does not undermine HMRC’s current position on responsible AI use. It does indicate that the systems and controls around AI in compliance work have been developing alongside the enquiry programme, rather than being fully established from the outset.

Risks and unanswered questions

There are still some practical questions about how this will work.

A move to case ownership may improve accountability, but it depends on the experience and judgement of individual caseworkers. Improvements to email handling address a particular frustration, but do not guarantee better quality enquiry management.

The absence of a specialist escalation route for complex science and technology disputes remains a limitation. Where genuine technical disagreements arise, advisors are still reliant on existing channels, which are not always well suited to resolving them.

There is also a lag effect. Claims opened under the campaign model are still working their way through the system, so recent experiences may not reflect how HMRC is now approaching enquiries.

Finally, HMRC remains under pressure to demonstrate that it is tackling error and abuse within the R&D Tax Credit scheme. That pressure does not disappear simply because the method of enquiry selection changes.

Conclusion

HMRC is changing how it approaches R&D Tax Credit enquiries, with fewer broad campaign interventions and more focus on higher-value and more complex claims.

This may reduce some of the indiscriminate pressure seen in recent years, but it is not a return to the position we saw before 2022.

For claimants, a lower likelihood of being selected at random does not reduce the level of scrutiny. For advisors, claims need to be technically robust, with clear cost methodologies and evidence to support them.

Enquiries are likely to be less frequent but more focused on the areas HMRC considers higher risk.