HMRC approach is harming valid R&D claims

15 Apr 2024

With HMRC investigating half of research and development tax relief claims, and criticism of inexperienced case workers, Danielle Ford, partner and Riocard Hoye, senior manager at haysmacintyre, examine how companies can deal with an investigation

Research and development (R&D) tax relief, aimed at supporting companies that invest in and work on innovative projects in science and technology, was first introduced in 2000, with R&D expenditure credit (RDEC) for larger companies being introduced in 2002. This article will refer to both schemes as R&D for simplicity.

R&D tax relief is designed to encourage investment in innovation and economic growth, broadly through tax relief against qualifying expenditure. However, R&D remains a hot topic and HMRC has changed its approach to R&D claims to ‘deny first, discuss later’.

Increasing claims