It has been reported that the R&D tax credits scheme for small companies has been abused by criminals who submit inaccurate and fraudulent claims on behalf of genuine companies. HMRC estimate that £496m was lost through fraud and error in the R&D schemes in 2021/22 alone.
There have been cases where company directors have been duped by so-called expert R&D advisers, who submit wildly inaccurate claims, then disappear with a large slice of the tax refunded.
In late January and early February 2023 HMRC wrote to over 2000 company directors whose companies have claimed R&D tax credits in the past, asking them to review the claims submitted against this checklist:
- Who helped with the supporting R&D report and are they qualified to do so?
- If you worked with a third party to make a claim, have they answered your questions satisfactorily?
- Have you read the R&D report, and do you agree with its contents?
- Do you understand what you’re claiming for?
- Have you read and understood the HMRC guidance on R&D?
- Have you considered the conditions for making an R&D claim?
- Are you happy that the R&D project is seeking an advance in the field of science and technology in general, not just an advance for your company?
- Does this R&D claim seem to be too good to be true?
If you are a company director, and have received a letter from HMRC, please talk to us before responding to HMRC.
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