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R & D Tax credits

R & D Tax credits

Anyone having an experience with HM Revenue & Customs in dealing with queries into claims ?

Some colleagues tell me they do not bother claiming because its all to technical or else they "wing " a claim .

Trying to get a view from across the UK

Thank you

Martin Malseed


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29th Feb 2012 15:18


I think it is dangerous to ignore them - possibly negligent?

I have had reasonable success with claims in recent years but I make sure I send detailed calculations plus explanations of the various projects involved in with the ct return.

If you do not want to make the claim yourself then (although it goes against the grain) I think you need to get a specialist involved to claim for you (at a charge of x% of the total claim no doubt) because it can be a valuable relief.

But get some reasonable reference matter on the subject and it is not too difficult to calculate a claim.

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29th Feb 2012 15:26


I agree that it would seem negligent to "wing" any kind of tax relief, including an R&D claim.

HMRC do raise queries on R&D, they have specialist R&D units which work with Inspectors to provide the necessary support.  And you're right, it's a very technical area.  So the answer is to try and learn more about it, in order to support a simple claim or alternatively to involve a specialist as taxhound suggests.

Not bothering to claim it is a strange thing to do - surely the discussion should take place with the client, and the client should decide if they wish to support the additional costs of investigating the feasibility and/or preparing an R&D claim?

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29th Feb 2012 16:41


The R&D department are actually very helpful if you speak to them.

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By RandD
14th Mar 2012 13:39

winging it

For those thinking of 'winging it' the fine for overclaiming R&D relief is the same as for underdeclaring tax owed in other areas-

The penalty rates for inaccuracies can be

up to 30 per cent of the potential lost revenue if the inaccuracy is carelessup to 70 per cent of the potential lost revenue if the inaccuracy is deliberateup to 100 per cent of the potential lost revenue if the inaccuracy is deliberate and the person attempts to conceal it

HMRC's own guidance advises:

Although it's not a legal requirement, HMRC encourages companies and organisations to:

tell them why the company or organisation considers its project(s) to be allowable as R&D (as defined in the section above)provide a summary of the costs incurred on the R&D and how the figures in the return were arrived at

We speak regularly to the HMRC R&D specialist units and their view is that undocumented claims are likely to have an enquiry sooner or later - their policy is generally pay first and ask questions later. So even if companies get a cheque from HMRC, there is the possibility of an enquiry years later later and repayment with interest and penalties if the claim turns out to be ineligible.

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