increase by 47%
Compliance within Research & Development Tax Relief has been a focus point for HMRC for some time now, and with uptake of the initiative growing year on year, HMRC is under an increasing amount of pressure to crack-down on illegitimate R&D claims.
In May of 2022, HMRC announced that R&D Tax Credit payments had been paused whilst moderators investigated a number of potentially fraudulent claims. During this time, R&D Tax Relief claimants and advisors saw a significant spike in HMRC enquiry into R&D Tax Credit submissions. This is unsurprising, considering that 2,000 new compliance officers have been hired to tackle abuse across the board.
That’s why, now more than ever, there’s no substitute for using an experienced R&D Tax Specialist.
Rogue operators hide behind percentage-based
R&D Tax Credit claims.
R&D Tax Advisors that charge a percentage of their clients’ R&D claims are commercially motivated to file the highest-value R&D Tax Credits possible, so that they can keep a larger portion of your claim benefit for themselves. For this reason, percentage-based advisors have been reported to overinflate R&D Tax Credit claims, and file them to HMRC in the hope that their exaggerated reports will stick.
Of course, this doesn’t apply to every percentage-based R&D Tax Consultant. But a great way to safeguard against inflated, potentially fraudulent R&D claims – and avoid the financial and legal penalties that they incur – is to use a Fixed Fee R&D Tax Credit Specialist.
How to safeguard your R&D claims in the new
era of HMRC scrutiny and enquiry.
All in all, we believe that abuse of R&D Tax Credit scheme can be mitigated by claimants being made aware of red flags to look out for when choosing a service provider. In addition, look out for indicators of a high-quality service, such as HMRC enquiry support at no extra cost, and resoundingly positive customer feedback.
Free enquiry support, which we offer at Claim Capital, acts as insurance in the case of unforeseen (and often, random) scrutiny. R&D Tax Advisors omitting information on enquiry support, or suggesting that this will come at a price, should be avoided at all costs.
Other than that, it’s up to HMRC to stamp-out the sources of fraudulent claims. And evidently, that’s what they’ve set out to do.