Care homes targeted by latest HMRC nudge letters

HMRC has issued one-to-many letters to a number of small business and mid-sized business taxpayers in the nursing and care home sectors.

The letter says: ‘It’s not impossible for nursing and care homes to meet the R&D criteria but we think it’s unlikely. This is because we’ve seen very little evidence of businesses in these sectors doing any qualifying R&D activity.’

HMRC is concerned that claims appear to be based on normal day-to-day activities rather than projects which seek an advance in science and technology as a whole.

It goes on to say that companies often receive unsolicited calls from R&D agents offering ‘no win no fee’ services. The agent will submit a claim for R&D tax relief to obtain a tax repayment from HMRC from which it will deduct its fee before paying the company the balance. However HMRC reminds taxpayers that because it has...