HMRC see an increase in fraudulent claims for R&D tax relief

HMRC state that they have seen an increase in fraudulent claims for Research & Development (R&D) tax relief. They believe companies in certain sectors are being deliberately targeted by third parties to make inaccurate R&D claims as an amendment to their Company Tax Returns. As a result of this, they are increasing their compliance enforcement activity.

As part of a “One to Many” letter campaign, HMRC have sent letters to company directors whose companies have made R&D claims in the past. The letter asks them to review their previous claims using a checklist to make sure that the information they have provided about their claim is complete and correct and, if there is an error, to make amendments as necessary.

Directors are prompted to review their R&D claims by using the following checklist:

• Have you read and understood the HMRC guidance on R&D?
• Have you considered the conditions for making an R&D claim? Are you happy that the project is seeking an advance in the field of science and technology?
• Do you understand what you’re claiming for?
• Who has helped with the supporting R&D report and are they qualified to do so?
• Have you read the R&D report, and do you agree with its contents?
• If you’re working with a third party to make a claim, have they answered your questions satisfactorily?
• Does this claim seem to be too good to be true?

See: Research and Development Tax Relief – HMRC One to Many letter