Many businesses are naturally concerned that by making an R&D tax credit claim they open themselves up to a much wider HMRC inquiry. As a firm we've got very strong relationships with HMRC both at a local level and at a central policy level. We also sit on the R&D consultative committee too. Through all of this engagement it's very clear that that's not the case, and HMRC have an active working brief to encourage the right businesses to make the right R&D claims.
One of my clients is a large manufacturer and in a particular year they were working on a project that was going to result in a much larger R&D claim. They were naturally concerned that that change would result in more scrutiny from HMRC. We approached the revenue before submitting the claim, invited them for a tour of the manufacturing facility and a presentation from their technical team. That open engagement and that collaboration with HMRC before even submitting the claim meant that when we came to file the return the claim was repaid within five working days.
It goes to show that a collaborative approach with HMRC actually really works and will expedite a claim rather than slow matters down. The key is not to be afraid of making an R&D tax credit claim for fear of an inquiry. All of our experience shows that engagement with HMRC actually builds a better long-term relationship with HMRC rather than resulting in wide reaching tax enquiries.
Download our thought leadership and practical checklist to help guide you through the key questions you need to ask yourself when assessing whether you have a valid R&D claim.