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HMRC suspends payment of some R&D tax credits

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Finally HMRC taking some action.

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By Hugo Fair
23rd May 2022 11:09

But what action? Affecting whom? And on what basis?
None of that is made clear.

"HMRC places certain R&D claims on pause while it investigates irregularities in a bid to mitigate abuse of the relief. Claimants are advised that there will be delays to the usual processing times while HMRC tries to prevent abuse of the relief. HMRC has also requested that claimants do not contact the R&D helpline/mailbox to chase their claims."
So no room for ensuing chaos then?

"Submitting additional information (as well as the R&D section of the CT600) to support any claim, such as an R&D report, will also help HMRC to process claims quicker."
I thought the R&D report (and supporting statistics/data) were a mandatory part of the claim - they've certainly been a standard part of any claim with which I've been associated - so what have HMRC been doing to check claims until now?

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Replying to Hugo Fair:
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By Leywood
23rd May 2022 11:34

Hugo Fair wrote:

HMRC has also requested that claimants do not contact the R&D helpline/mailbox to chase their claims."

With that comment, the cynic is me says this, in part, is another madcap idea to help them catch up on other piles of work. Instead of making existing staff work harder/longer hours. Like removing the ability to phone at certain times, or use the chat function or any one of the bonkers things they introduce.

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By ireallyshouldknowthisbut
23rd May 2022 11:29

I assume they have finally rumbled some of the R&D factories are putting in highly iffy claims safe in the knowledge HMRC don't check anything.

I had an architect client come to me claiming ANY work they do on listed buildings is R&D. They are a big firm too and got themselves endorsed by his professional body. Whilst clearly some architect work might be cutting edge use of materials etc and so R&D, its going to be limited for the "stick a premade timber and glass extension on a listed building" type work which is his main earner.

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Replying to ireallyshouldknowthisbut:
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By bettybobbymeggie
23rd May 2022 11:49

ireallyshouldknowthisbut wrote:
I assume they have finally rumbled some of the R&D factories are putting in highly iffy claims safe in the knowledge HMRC don't check anything.

+1

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By Justin Bryant
23rd May 2022 11:33

We have all been commenting on the prevalence of dodgy R&D claims here for many years.

The words "horse", "stable door" and "bolted" spring to mind.

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Replying to Justin Bryant:
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By bettybobbymeggie
23rd May 2022 11:51

Shutting the stable door doesn't stop HMRC pursuing taxpayers to recover dodgy claims for many more years to some.

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Replying to bettybobbymeggie:
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By Justin Bryant
23rd May 2022 13:23

Yes; but that's hardly an excuse for HMRC's total apathy up till now is it (and the 4 or 6 year time limit will prevent HMRC recovering on many of these dodgy R&D claims and many companies will have since disappeared of course having benefited from the tax saving) plus prevention is better than cure n'est-ce pas?

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By bettybobbymeggie
23rd May 2022 13:27

I agree with you Justin, I am just mindful of the DOTAS regime that came into force in the earlier 2000s. Rather than shutting the stable door to EBT's etc. HMRC left the door open but pointed a CCTV camera at it. What followed were literally thousands of s9A enquiries that then remained open indefinitely. These enquiries were raised on the basis of the DOTAS number disclosed in taxpayers' returns. I wonder if HMRC's R&D plan may follow a similar pattern.

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Replying to bettybobbymeggie:
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By Justin Bryant
23rd May 2022 13:37

Dodgy R&D claims have nothing to do with DoTAS. Bizarrely and perversely DoTAS can punish legal (i.e. non-criminal) tax avoidance far more punitively (in terms of potential financial penalties at least) than outright tax fraud.

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By Open all hours
23rd May 2022 18:41

Yet HMRC are supposed to read these pages. Shame they choose to ignore us in this and other matters.

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