R&D tax relief: businesses urged to review claims

As part of HMRC’s ongoing attempt to crackdown on aggressive (and in some cases allegedly fraudulent) R&D claims, HMRC have recently started a One to Many letter campaign, targeting companies that have previously made claims for R&D tax relief in their corporation tax returns. The letters, which have been sent to 2,024 companies ask companies […]

As part of HMRC’s ongoing attempt to crackdown on aggressive (and in some cases allegedly fraudulent) R&D claims, HMRC have recently started a One to Many letter campaign, targeting companies that have previously made claims for R&D tax relief in their corporation tax returns.

The letters, which have been sent to 2,024 companies ask companies to review their previous claims, using a checklist, to ensure that all the information they submitted was correct.

Where mistakes are identified, companies are being asked to make amendments to their claims as appropriate.

Lucy Lloyd, Tax Manager and R&D specialist said: “Whilst HMRC’s goal from this campaign is to identify over aggressive practices linked to R&D claims, responding to these letters inaccurately can open clients with genuine claims up to complex and time consuming formal enquiries.

“We are urging anyone who has received one of these letters to take professional advice immediately. Whilst the letters are not issued as part of any formal, legislative enquiry, ensuring a company’s response is appropriate is likely to be invaluable to avoid a more formal approach from HMRC in the future. Significant changes are also being made to the UK’s R&D regimes in the coming months which need to be taken into account.

“HMRC’s focus in this area is likely to continue for some time and we therefore also urge all companies who are approached by third parties offering to help with their R&D claims to proceed with caution. As with all things, if something sounds too good to be true, it probably is.”

Established in 1991, Kilsby Williams works with clients from across South Wales, the Midlands and London, ranging from sole traders to companies in international quoted groups.

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