GovGrant R&D specialists logo – A Source Advisors company

How should accountants deal with HMRC enquiries into their clients’ R&D tax relief claims

Posted on Wednesday 18 January 2023 by Vicki Morrall | Accounting Partner Director

As we move into a New Year there seems to be rumblings of concern from several accountants about the changes within the R&D tax relief regime, and the direction of travel from HMRC regarding the schemes.

HMRC increase their scrutiny of R&D tax relief claims

For some time, we have been aware of that R&D tax relief claims are under greater scrutiny and there has been an increase in the number of HMRC enquiries that have landed on the doorsteps of businesses. These enquiries are asking for a greater level of detail and evidence, demanding increased levels of time to respond appropriately.

The concern of time-pressured accountants seems to both be in the amount of work involved and also confidence in the answers and the detail that HMRC are demanding.

Accountancy practices facing HMRC enquiries on behalf of their clients

In recent conversations with two well-established accountancy practices, both have clients in enquiry where claims have been prepared internally. They have expressed significant unease about the level of technical detail and compliance required to defend these claims.
Both these firms wanted information about GovGrant’s enquiry service, to provide their clients with an independent assessment of the original claims filed and subsequent enquiry raised.

Unfortunately, in the first one of these enquiries, the accountant and client had already responded to multiple letters from HMRC. Whilst the questions had still not been satisfied, the enquiry was too far along the process for it to be possible for a third party to intervene. The second enquiry was, fortunately, at first letter stage. Therefore we were able to engage with the client directly and assist them with an initial claim compliance assessment and through the enquiry process.

What options are there for a specialist third party enquiry service?

With the upcoming changes following the Autumn Statement and increased scrutiny around technical compliance, the GovGrant enquiry service can provide an independent assessment of any enquiries that are opened. This assessment gives a third-party opinion of the technical compliance of the claim filed and can provide support and assistance in dealing with the enquiry. If there is any uncertainty over the questions HMRC are asking and the justification of eligibility, GovGrant can provide clarity and a professional opinion, enabling a coherent and technically-led response to be provided to HMRC. This aims to make the enquiry processes much smoother, reducing the time-consuming back and forth correspondence often found if HMRC doesn’t feel their questions are being answered clearly.

What to do if your client receives an HMRC enquiry?

We would recommend getting in touch immediately, time is of the essence. If you would like to know more about the GovGrant enquiry service or any of our other services, please contact me

GG RD tax relief

About Vicki Morrall | Accounting Partner Director

Vicki co-founded R&D tax consultancy Luvo Financial in 2015. In 2021 GovGrant acquired Luvo, which allowed Vicki access to additional services for her clients and partners. Vicki works with our team to further develop our extensive range of tools, benefits and services to meet the needs of our Accounting Partners. View profile