HMRC escalates action to prevent fraudulent R&D credit claims

HM Revenue and Customs (HMRC) has taken steps to crack down on fraudulent Research and Development (R&D) tax credit claims including the delay of claims and even legal action in some cases.

HMRC’s Fraud Investigations Services unit has sent letters to suspected abusive claims, requesting more information to help verify them as being authentic.

The letter asks recipients to get in touch with HMRC within 30 days if they believe their claim is genuine but also warns the company that anything it says about its claim could be used as evidence in respect of a future criminal investigation. 

In a statement, HMRC says: “Where evidence leads us to believe that fraudulent claims may have been made, we will issue these letters which ask for more information to help verify the claims.

“We have not written to R&D claimants accusing them of fraud. These letters state that we have not opened a criminal investigation into suspected fraud but reserve the right to do so.”

As a result of its increased enquiries, HMRC now has revised its target time of 40 days (previously 28 days) to either repay the tax credit claimed or contact the claimant. HMRC has asked that claimants remain patient and do not contact them to chase their claims. Instead, it has asked agents and companies to review their online account for updates on the status of claims.

Need help making an R&D claim?

An HMRC report issued in November 2021 highlighted the impact of cold callers contacting small businesses suggesting they are eligible to make a claim. If you believe you have received such a call, our team of experts will be able to confirm your eligibility and can help submit an R&D tax credit claim. This will ensure the value of your claim is maximised and can be robustly backed up should HMRC challenge it.

If you would like to learn more, please get in touch with us on 01442 268000 or use our simple online request form.

Last updated: 20th March 2024