UHY Ross Brooke Chartered Accountants

Don’t fall foul of HMRC R&D tax credit claims investigations

HMRC letter and coins

HMRC are now taking a much more aggressive approach to R&D tax credit claims and a recent case in point highlighted this.

On 16th September 2021, the courts dismissed an appeal in relation to a research and development claim. In summary the appellant had received a repayable credit from HMRC, however subsequently an enquiry had been opened into the accounting period in question. The respondents then issued a closure notice denying the claim and requiring the tax credit to be repaid.

At the first-tier tribunal the commissioners for HMRC were successful in arguing that the Appellant had failed to establish on the balance of probabilities that the activity involved a project seeking to achieve a technological advance through the resolution of a technological uncertainty.

The case demonstrates the intricacies of the R&D regime and the importance of using experienced R&D professionals to assist with claims / documenting and evidencing why a project qualifies in accordance with the BEIS guidelines. Some of the pitfalls identified in the case are outlined below:

  • the Appellant provided no evidence from a competent professional in the field
  • the Appellant do not provide contracts or invoices to identify the exact nature of the work commissioned
  • the platform was described in a permanent ‘beta state’ which enabled HMRC to argue that the uncertainty had not been resolved
  • the scientific or technological uncertainty which the proposed platform was intended to overcome was not clearly outlined

UHY Ross Brooke employ experienced R&D specialists to ensure that only robust claims are submitted and where necessary will advise clients to amend or indeed withdraw claims where appropriate.

Next steps

If you would like assistance in compiling R&D claims please get in touch with a member of the UHY Ross Brooke team. or fill in the form below to receive your free copy of our UHY Research & Development Guide.

Find out more about our R&D tax claim specialists.

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