HMRC’s new approach to R&D Tax Credit claims has resulted in a significant challenge to many companies.

With the plethora of changes to the R&D tax relief programme, none have been more important than HMRC’s increased focus on what qualifies as an eligible R&D project.

From the inception of the R&D tax relief programme, HMRC took a light-touch approach to querying R&D tax credit claims. Many companies are surprised to learn that HMRC reviewed very few claims to determine if the projects met the R&D tax relief criteria. Most R&D tax relief claims were merely accepted ‘as filed’ with no compliance check.

However, HMRC stated in 2023 that they felt up to 50% of all claims were in error. As a result, HMRC has hired hundreds of tax inspectors to carry out compliance checks of R&D tax credit claims.

One major change within the R&D tax relief programme, is that “Additional Information” must be submitted via the new government portal. Essentially the additional information that must be submitted involves answering specific questions as to why the project meets the definition of R&D.

This new requirement applies to all companies submitting an R&D tax credit claim on or after 1st of August 2023. This requirement is in addition to the filing requirements on the CT600 and/or CT600L.

The Definition of R&D

Many companies struggle with the definition of R&D. The main reason is that the definitions for scientific or technological uncertainty and advancement can appear vague. We have found that even after many years of filing R&D tax credit claims, our clients still struggle with the definition. This is where RDP really provides value to the R&D tax credit claim process.

RDP’s technical staff, comprised of computer science, engineering and life science professionals. Who have the academic and practical experience to prepare R&D tax credit claims. Our team is also very proficient and professional at defending R&D tax credit claims should HMRC carry out a Compliance Review or Query. We cover all fields of science and technology, and we stand by our work.

Are you still unsure of what qualifies?

If you are uncertain whether your project qualifies as R&D. Or maybe concerned about HMRC’s new approach to R&D, then RDP will carry out a free assessment. If you would like to discuss our services and fees, please contact our team today. By reaching out to us at 0208 214 1341 or email Jenni on [email protected]