Importance of providing the right evidence

Key points

• In Get Onbord Ltd the taxpayer provided evidence to show its activities should be classified as research and development.
• HMRC was unable to justify its view that the project did not qualify for relief.
• The First-tier Tribunal considered there had to be a shifting of the evidential burden.
• Difference between ‘evidence’ and ‘after-the-event explanations’.
• Should taxpayers go beyond the confines of an information request to set out their position with supporting evidence?

It is not so long ago that research and development (R&D) disputes were relatively uncommon certainly in the First-tier Tribunal (FTT). This has changed significantly over the last decade. As the number of taxpayers seeking to rely on R&D relief has grown rapidly there has been a corresponding uptick in compliance activities to root out non-qualifying projects. HMRC now investigates a substantial proportion of R&D claims.

This more sceptical approach has caused consternation...