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What are the risks of submitting a claim for R&D Tax Credits?

23 Oct 2018

The main risk of submitting an R&D claim is that HMRC could open an enquiry.  This doesn’t mean that they have rejected your claim, just that they have some questions they would like answered.

If a claim has been prepared with the necessary care, these questions should not cause a problem but they may take a great deal of time to answer to HMRC’s satisfaction.

Following an enquiry, HMRC will either approve or reject the claim. This seems to be where a lot of people think the process stops. However, whether the claim is ultimately approved or rejected, HMRC can issue a significant fine if they feel that it is necessary to do so – up to 100% of the value of the R&D claim.

R&D Tax Relief is a fantastic incentive for companies undertaking qualifying activities but claims need to be compiled correctly. Even claims that have been submitted and seem to have been successful are not exempt from ramifications at a later date.

This should in no way discourage a company from looking into R&D Tax Credits.  The benefit could be great and the risk of an enquiry is minimal as long as:

  • You seek advice from someone experienced in compiling successful R&D claims for companies in your industry
  • Supporting documentation is submitted with the claim which is fit for purpose and highlights to HRMC why your company meets their criteria for an R&D claim
  • The claim has been compiled through a robust process with reasonable care.


If you are a company owner/decision maker and have any questions about R&D Tax Credits or how they could benefit your company, please get in touch via our Contact Us page.

If you are an accountant and want to talk about how you can ensure your clients are well provided for in terms of R&D Tax Credits, please get in touch via our Contact Us page.



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