HMRC have recently written to businesses who have previously made Research and Development Tax Relief (R&D) claims. The letters ask claimants to use a checklist to review those earlier claims.

What’s the point of the letters?

The letters are part of an HMRC ‘One to many’ campaign, which sends the same letter to a segment of the taxpayer list. There is no implication that recipients are thought to have submitted erroneous claims.

The intention of the letters is for the claimants to review the earlier claims using the checklist, to ensure they are accurate and, if there is any error, to make any amendments that may be needed.

Why have HMRC sent these now?

The letter states that there has been an increase in fraudulent claims, and as a result, HMRC are increasing their related enforcement activities.

It goes on to outline that it is the responsibility of Directors to ensure that claims made by the Company are entirely accurate, and that any claim that is subsequently found to be incorrect will need to be repaid.

What do I need to do?

If you receive a letter from HRMC that asks you to review an earlier claim, you need to follow the checklist included in the letter. This includes confirming:

• That you understand the guidance around R&D claims.
• That your claim meets the criteria for a valid claim in terms of the advances you’ve made.
• That anyone who’s helped you prepare the claim is qualified to do so.
• That you agree the contents of the claim.
• That any third party that you’re working with in the preparation of the claim has answered any questions you may have to your satisfaction.
• That the claim appears valid, and not ‘too good to be true’.

What if there is an error?

If you think there is an error when you review the earlier claim, you can amend your Corporation Tax Return online.

Will HMRC open an enquiry?

It’s always possible!

If HMRC have reason to review a previous claim, or find any future claim is incorrect, they may well open an enquiry, at which point they could look at earlier claims.

An enquiry would certainly delay payment of any existing claim, and could lead to a penalty as well as repayment being required for any earlier claims they look into that are found to be inaccurate.

I’m worried, what can I do?

If you’re unsure about a claim you may have submitted before, our advice would be to review its content sooner rather than later, and make an amendment if you feel it was overstated. If you do receive an HMRC letter, please don’t ignore it!

The landscape around R&D claims is changing, as we’ve seen in recent months, largely to reduce the huge number of fraudulent claims that have been submitted. Valid claims are still worthwhile, but will require more careful and thorough preparation than may have been needed in the past to ensure they aren’t overly delayed at HMRC.

If you’re still worried or unsure, please get in touch! We have a number of clients who are successful with their R&D claims, so are able to advise accordingly.