Navigating HMRC’s R&D crackdown

In this webinar, our expert panel focuses on how organisations have been experiencing increased scrutiny from HMRC when submitting R&D tax relief claims.

HMRC now require additional information to file R&D claims and are increasingly likely to initiate an enquiry to ensure the validity and accuracy of the claim before approving it.

Our tax and R&D experts discuss the themes of these compliance checks, what HMRC are specifically seeking, and how to mitigate some of the risks associated with making a claim in the current climate.

Questions:

Introduction

1. Why are we seeing a crackdown, and what is the extent of the crackdown?

2. Is this addition scrutiny being applied to retrospective claims or does it mainly go towards new ones?

3. Does this suggest that it might not be a good idea to apply for R&D going forward?

4. How far back can HMRC go to review historic claims?

5. Is this why claims are taking longer to process current claims this year?

6. What are the typical reasons why HMRC might feel a claim is invalid?

7. How do HMRC conduct these enquiries?

8. Have HMRC articulated what sought of evidence is sufficient for them? As some documentation they’ve put out states do not need extra records.

9. What level of supporting documentation would be sufficient for HMRC?

10. If HMRC find fault with a claim, do they just seek to recoup the tax benefit received, or are they issuing additional fines? If it turns out that the R&D claim is legitimate, does HMRC reimburse the legal costs?

11. What happens if you respond to an enquiry and provide supporting information but you still disagree with their outcome?

12. In future should we “dumb down” claims – explain them really in layperson’s terms – that are about software if they have such limited understanding of technology?

13. How do we minimise the risk of penalties if HMRC state that the claim was incorrect or invalid?

14. What level of time tracking do we need to produce to support our claim? for example is hours per month per person sufficient or does it need to be detailed specifically hour by hour, or somewhere in between?

15. How will this crackdown impact those who have applied for advance assurance?

16. What are the typical things that HMRC are picking on and what are the areas we can help with?

17. There has been lots of press about how HMRC are going about this – what has been the reaction?