Navigating HMRC Enquiries for R&D Tax Claims

March 27, 2024

Last year it was announced that HMRC would be imposing further measures to reduce false or inaccurate claims for research and development (R&D) tax relief to combat the estimated £1.3 billion of error and fraud. This sparked concerns that the extra red tape could deter genuine claims and dull the UK’s innovational spirit.

Since the introduction of these tighter procedures there is an additional information form to complete and there has been a notable surge in enquiries.

Enquiries were quite uncommon pre-2023 – but with HMRC issuing a report that found 16.7% of R&D tax claims were wrong or fraudulent, the volume of enquiries have increased.

Bonham & Brook’s Head of Compliance, Malcolm Henderson, comments:

“HMRC are in a difficult position where they clearly need to address the issues of fraudulent claims – which we fully support, however, the process shouldn’t discourage the incredible UK businesses that are working on exciting innovations and should benefit from the tax savings that the R&D tax scheme offers.”


So, what is the impact of the increasing enquiries on innovative companies?

“No business owner wants to receive a brown envelope from HMRC through their door! The thought of being investigated or having your claim looked through with a fine-tooth comb can be daunting, even for the most honest and clear of business claims. Our advice is not to panic. We know that enquiries have risen, and many will be random spot-checks and nothing to worry about. As long as your claim is legitimate and accurate, there shouldn’t be anything that comes from the enquiry other than a delay to your latest claim.”

If your company is claiming tax relief through an R&D scheme, it is crucial to understand HMRC enquiries and take proactive steps to mitigate your risks.

Let’s take a look at what an enquiry is and how you can reduce your risk…


What is an Enquiry?

An enquiry is an official investigation by HMRC. It can be initiated within 12 months after payout and up to 20 years after payout if fraud is suspected. Additional information may be requested to ascertain eligibility. An enquiry could result in a payout refusal, reduction, a penalty, or prosecution if fraud is proven. Alternatively the enquiry could turn out nothing and your claim is approved with no further action.


How to Avoid Enquiries

There are a few things that your business can do to avoid an enquiry from HRMC.

  • Engage with an experienced and reputable advisor
  • Understand the eligibility criteria before starting a claim
  • Avoid including any marginal / non-R&D costs in your claim
  • Ensure accuracy in the submitted figures
  • Provide a comprehensive technical narrative
  • Review and discuss the claim before submission
  • Have well organised paper work and evidence
  • Keep detailed records
  • Respond promptly to any questions
  • Be prepared for a review
  • Stay informed about HMRCs processes, guidelines and any changes


Has your enquiry with HMRC been running a while?

Our resident Head of Compliance and ex-tax inspector, Malcolm Henderson shares his thoughts…

“You’ll know it is when you get HMRC’s ‘View of the Matter’. At this point, they’ll probably have rejected your claim as ‘no qualifying R&D projects’. They might additionally say that you’ve claimed under the wrong relief scheme because they believe your costs are subsidised as you’re paid for the work. Or that as you’re working to another entity you’re acting as a subcontractor.

Take care here as HMRC occasionally treat this as a Closure Notice also which is confusing!

The view of the matter will also likely ask questions about HMRC’s decision on whether to seek a penalty, (fine) on top of any money you may need to repay. It’s imperative that these questions are answered in a reasoned and cautious way.

Finally, they’ll issue a Closure Notice. This must be treated with extreme care as it will give you 30 days to appeal HMRC’s decision. It must be done in time, as requesting HMRC to accept a late appeal is likely to fail. You’ll also need to consider applying for postponement of any tax due.”


About Bonham & Brook

Bonham & Brook are well versed in dealing with R&D tax claims and the subsequent enquiries that sometimes come from HMRC as part of their checks.

Whilst we have no concerns with the claim itself, as we would work with you to ensure all claims are legitimate and accurate, we can assist with responding to their further enquiries and questions in the right way.

We will;

  • Respond to HMRC on your behalf
  • Respond promptly and adhere to any deadlines
  • Give sufficient information
  • Handle all communications

Our Head of Compliance, Malcolm Henderson, has a background in working for HMRC as an R&D tax Inspector – so we are well positioned to avoid enquiries in the first place and have the ability to respond and resolve any that do come through promptly.

Whilst claiming R&D tax relief can be immensely beneficial for your business, it is essential to navigate the process carefully. Instructing professionals that can manage your claim from start to finish allows you to focus on where your skills lay and run your business with peace of mind that your claim is going to be handled well and your claim will be maximised.

For further information on how we can help with a tax enquiry or help with your Research and Development Tax Claim, please get in touch on 020 3523 9125 or email

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