Adequate information was available to HMRC

The taxpayer amended its return for the accounting period to 30 April 2020 to claim research and development (R&D) relief. It included an R&D report prepared by its adviser after ‘extensive discussions’ with the technical team and an assessment to ensure the projects qualified for relief. The taxpayer also claimed R&D relief in its return for the year to 30 April 2021.

After an enquiry into the 2021 return HMRC concluded the claim did not fall within the definition of R&D and in March 2023 issued a closure notice refusing relief. In June 2023 HMRC raised a discovery assessment for 2020 on the basis that the claim contained inaccuracies.

The taxpayer appealed.

It was accepted that the claim for 2020 was excessive and that HMRC had made a discovery. The issue was whether at the time the enquiry window closed the ‘hypothetical HMRC officer’ would have...