R&D enquiries – Where are we going?

Key points

• HMRC has rejected FOI requests aimed at understanding how many R&D enquiries have been opened across the period prior to its current campaign.
• It is possible that claims that should not have been accepted were and gave the impression of a ‘lower bar’.
• HMRC’s current approach to handling R&D enquiries is to use a volume compliance approach.
• The complexity of the R&D rules is leading clients to consider diverting R&D investment – and therefore jobs – to other countries.

We have felt for a number of years that research and development (R&D) was an area where HMRC had developed a blind spot. Claims were being submitted by R&D agents which did not immediately appear to qualify – yet they were then ‘accepted’ by HMRC and processed successfully.

These things were widely discussed by those tax specialists working within the sector. During an R&D consultative committee meeting...