R&D claims nudge letters

It has been reported that the R&D tax credits scheme for small companies has been abused by criminals who submit inaccurate and fraudulent claims on behalf of genuine companies. HMRC estimate that £496m was lost through fraud and error in the R&D schemes in 2021/22 alone.

There have been cases where company directors have been duped by so-called expert R&D advisers, who submit wildly inaccurate claims, then disappear with a large slice of the tax refunded.

In late January and early February 2023 HMRC wrote to over 2000 company directors whose companies have claimed R&D tax credits in the past, asking them to review the claims submitted against this checklist:

1. Who helped with the supporting R&D report and are they qualified to do so? 
2. If you worked with a third party to make a claim, have they answered your questions satisfactorily? 
3. Have you read the R&D report, and do you agree with its contents? 
4. Do you understand what you’re claiming for? 
5. Have you read and understood the HMRC guidance on R&D? 
6. Have you considered the conditions for making an R&D claim? 
7. Are you happy that the R&D project is seeking an advance in the field of science and technology in general, not just an advance for your company? 
8. Does this R&D claim seem to be too good to be true? 

If you are a company director, and have received a letter from HMRC, please talk to us before responding to HMRC. 

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