New Forest


Research & Development (R&D) Claim Scrutiny

HMRC are under pressure from the government to clamp down on incorrect R&D claims that are being made. To help achieve this, HMRC have significantly recruited more members to its R&D compliance team in the last few months.

The R&D scheme allows companies to claim additional tax relief on qualifying expenditure relating to qualifying R&D projects. In short, the R&D tax relief scheme is aimed at those companies who are seeking to make an advance in a particular area of science and technology.

HMRC perceive that a number of the R&D claims do not relate to an actual innovation/appreciable movement in a particular area of science or technology. Instead, HMRC perceive that a lot of the advances made are commercial which is not what the scheme seeks to reward.

In particular, HMRC are scrutinising R&D claims in relation to software, in order to ensure that any claims made relate to an underlying advance in technology (that’s not readily deducible by a skilled professional) as opposed to adapting an existing piece of technology to suit their commercial needs.

Unfortunately, as a result of this increased scrutiny it is felt that many genuine R&D claims will be enquired into by HMRC, the cost of defending these claims may deter companies from making a legitimate claim.

We still believe that the R&D tax relief scheme is worthwhile and we are very happy to work with you if you believe your company has undertaken work that has led to an advance in science or technology.

If you would like further information or have any questions, please contact Joe Wilson on 023 8046 1237

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