Date posted: 7th Mar 2023
Due to the alleged abuse of the Research and Development (R&D) tax relief schemes, HMRC have issued “nudge” letters to the directors of several claimant companies asking them to check their claims.
Here is an extract from the letter:-
As Company Director, it’s important you submit accurate claims for the correct amount of tax relief. If we check a claim and find it’s incorrect, your company might be asked to pay back the full amount.
This letter is not a compliance check into your Company Tax Return. It is to help you make sure your claims are complete and correct.
What you need to do now
Please review your previous R&D claim using the checklist below to make sure all the information you have given is complete and correct.
- 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 project is seeking an advance in the field of science and technology?
- Do you understand what you’re claiming for?
- Who has helped with the supporting R&D report and are they qualified to do so?
- Have you read the R&D report, and do you agree with its contents?
- If you’re working with a third party to make a claim, have they answered your questions satisfactorily?
- Does this claim seem to be too good to be true?
If you’re unsure about the answers to these questions, you should contact HMRC.
In some circumstances we may need to open an enquiry into your claim. This could lead to a delay in us paying you any tax relief due. It could also mean that we have to reject your claim if we find it’s incorrect. And we could charge you a penalty. The best way to avoid delay, rejection of your claim, or penalties is to check your previous and future claims online now.”
In our view, this feels very much like a “fishing” exercise by HMRC and there is no statutory obligation to reply.
However, we encourage all R&D claimants to contact us if they have any queries.