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Research and development negativity

27 March 2023 / Nigel Holmes
Issue: 4882 / Categories: Comment & Analysis , fraud , HMRC , R&D , Investigations
116759
Don’t be so negative

Key points

  • HMRC’s recent crackdown on fraud and error is causing potential R&D claimants to think twice before applying for the relief.
  • HMRC does not follow its own guidance during investigations and is not doing enough to reassure potential applicant companies.
  • New regulations mean accountants will need to spend more time on R&D applications and HMRC guidance does not provide sufficient clarity.
  • More changes are coming but it is still a generous relief.

There has been a lot of negativity around research and development (R&D) tax relief ever since HMRC began its crackdown on fraud and error – and it is having a chilling effect.

It was vital that HMRC improved the robustness of the scheme as it is estimated that the level of fraud for R&D tax relief reached £469m from 2021-22.

Fraud doesn’t just harm taxpayers either as innovating companies are only properly rewarded if...

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