Understanding HMRC R&D Tax Credit Enquiries

For businesses claiming R&D tax relief, receiving an HMRC enquiry can be a daunting experience. HMRC has increased scrutiny of R&D tax credit claims to ensure compliance and prevent fraudulent or exaggerated submissions. Understanding why an enquiry arises and how to handle it effectively can make all the difference in securing your claim.

Why Does HMRC Open an R&D Enquiry?

There are several reasons why HMRC may launch an R&D tax credit enquiry, including:

• Insufficient technical or financial justification – HMRC requires clear evidence of qualifying R&D activities and associated costs.
• Unclear or exaggerated claims – If the claim lacks detail or appears disproportionate, it may trigger further review.
• Inconsistencies in previous submissions – A sudden increase in R&D expenditure or deviations from previous claims may raise red flags.
• Industry risk factors – Some industries are subject to more scrutiny due to historical misuse of R&D tax relief.

The HMRC R&D Enquiry Process

If HMRC has selected your claim for an enquiry, they will typically notify you in writing. This marks the start of the HMRC R&D enquiry window, during which you must respond to their queries and provide further evidence to support your claim.

The process generally follows these steps:

1. Initial Enquiry Notification – HMRC will outline the concerns and request additional information.
2. Submission of Supporting Evidence – Businesses must provide detailed documentation, including project reports, financial breakdowns, and justifications for eligibility.
3. HMRC Review & Further Questions – HMRC may request further clarifications, interviews, or site visits.
4. Resolution & Decision – HMRC will either accept, amend, or reject the claim based on the provided evidence.

How to Respond to an HMRC Enquiry

1. Act Promptly – Respond to HMRC’s enquiry within the given deadline to avoid penalties or unnecessary delays.

2. Review Your Claim Thoroughly – Ensure all technical and financial justifications align with HMRC’s guidelines.

3. Provide Clear Evidence – Supply comprehensive project descriptions, detailing the uncertainty, advancements, and systematic investigation required in your R&D activities.

4. Seek Expert Guidance – Engaging R&D Enquiries, specialists in HMRC R&D tax credit enquiries, ensures that your response is structured effectively and maximises your chances of a successful outcome.

5. Maintain Compliance Going Forward – Implement best practices in record-keeping to reduce the likelihood of future enquiries.

How R&D Enquiries Can Help

At R&D Enquiries, we specialise in managing HMRC R&D tax enquiries, ensuring businesses navigate the process with confidence. Our services include:

• Full Enquiry Management – We handle all correspondence and documentation with HMRC.
• Technical & Financial Justifications – Ensuring your claim meets the stringent R&D eligibility criteria.
• Minimising Risk of Rejections or Reductions – Strengthening your claim to secure the maximum relief available.

Need Assistance with an HMRC R&D Tax Enquiry?

If you’ve received an HMRC enquiry into your R&D tax credit claim, acting swiftly and strategically is crucial. Let R&D Enquiries guide you through the process and ensure the best possible outcome.

 

👉 Contact us today to discuss your HMRC R&D enquiry and protect your claim.