Accountants – Is your R&D claim ‘Accepted’ by HMRC?
YesTax provides a dispute resolution service when claims produced by accountants are taken up for enquiry by HMRC. This is as a result of a growing trend in recent years where accountants have filed claims and informed their clients the claim has been accepted. Several months later, the client and adviser receive a strongly worded letter from HMRC, questioning one or several aspects of the claim.
There is a common misconception regarding R&D tax claims. Many advisers assume that if HMRC has paid out on a claim, the case is closed and the claim is ‘accepted’. This is a dangerous assumption to make. Payment of a tax credit breeds false confidence. HMRC has powers to open an enquiry into a return 12 months after the statutory filing date (normally two years after the end of the accounting period). Even if a tax credit has been paid, it may be subsequently challenged – and clawed back.
Accountants who have filed R&D tax claims should be asking themselves a number of important questions:
- Have I made R&D tax claims in the past which I am confident about, from both a technical and cost perspective?
- Am I aware of the complex rules regarding R&D tax relief, such as connected party subcontracted cost restrictions and capitalised expenditure?
- Would I be completely confident in defending any previously submitted claims if HMRC were to open an enquiry?
- Would I be confident that there would be no case of negligence to answer from a client, if an enquiry resulted in a significant corporation tax demand by HMRC?
- Am I confident that all my clients who are eligible to make a claim for R&D tax relief are actually making a claim?
If the answer to any of the questions above is ‘no’, you may wish to speak to one of the specialist R&D tax advisers at YesTax. Having held senior positions in the R&D advisory sector for over ten years, our Directors are amongst the most experienced in the UK. Our expertise is second to none in this area of tax. Partnering with YesTax ensure your clients receive specialist advice and minimise the risk of an enquiry.