HMRC’s plans to stop abuse of R&D tax reliefs

HMRC has been growing increasingly concerned about abuse of the research and development (R&D) tax relief scheme and announced plans last year to clamp down on rogue claims.

HMRC’s unease stretches back years. It estimates that £311m has been lost due to fraud and error in the last two years.

The department has been quick to respond hiring 100 new caseworkers to boost the amount of proactive compliance work it is able to do. They are partly responsible for an increase in tax enquiries focused on R&D tax reliefs.

The extra personnel turned up the heat on those who had made false claims or been badly advised. This led to a lot of scaremongering in some quarters prompting a number of businesses to abandon legitimate claims wrongly even with credible accountants and specialist firms.

This is evidence of how abuse of the...