In November the Auditor General concluded his audit of HMRC. The resulting report has numerous recommendations across all aspects of HMRC’s service delivery, but it has particularly notable recommendations for the R&D tax credit scheme.

HMRC are now committed to hiring “an additional 100 fulltime equivalent staff to work on R&D reliefs”. They will use this extra resource to establish “a revised risk screening process to support the review of claims”. They will also be expanding their “random enquiry programme” to ensure that they have a clearer picture of the number of fraudulent claims being submitted.

Here’s the relevant section from the Auditor’s report:

HMRC Audit Extract

We now expect there to be an increased level of scrutiny in how all claims are assessed, which is something we welcome. We have seen claim reports from other providers and accountants which fall significantly below standard, including additional illegitimate costs being claimed for. The random enquiry process will also affect the reliability of receiving your R&D tax credit within 28 days of its submission.

With these increased resources and new compliance measures in place, it’s more important than ever to ensure that your claim is robust and capable of withstanding any scrutiny. HMRC may also fine you for any inaccuracies.

To help ensure your claims are up to standard, we’re providing feedback on any previous claim reports free of charge. In the feedback, we’ll specify which (if any) parts of your claim fall below HMRC’s expectations. This will then give you a better idea of how to make next year’s claim.

Additionally, it’s important to choose a provider which will defend your claim against an enquiry from HMRC without any extra charge. Enquiries are often lengthy and laborious and can be costly if your provider charges separately for them. With the new random enquiry programme being rolled out in 2021 this has become more important than ever.

If you want to be sure that your current claim process is reliable, then get in touch with one of our team and they can guide you through any necessary areas of improvement.