HMRC R&D Enquiry and Compliance Check Support
HMRC R&D enquiry support means having a specialist answer HMRC's questions about your claim, gather the technical and cost evidence, attend meetings and protect your position on penalties. If you have received a compliance check letter, the reply date in that letter is the first priority, so contact a specialist as soon as possible.
What happens in an HMRC R&D compliance check?
In a compliance check, HMRC writes to the company, or to its agent, asking for information about the claim. Typical requests cover how the projects meet the definition of R&D, who did the work and their competence, how costs were apportioned, and evidence such as timesheets, contracts and technical documents. HMRC may ask for a meeting with the technical leads. The check closes when HMRC accepts the claim, agrees an adjustment, or issues a closure notice you can appeal.
R&D compliance work is now handled within HMRC's Wealthy and Mid-sized Business Compliance directorate, and HMRC has an expert advisory panel to support caseworkers on technical areas such as AI, life sciences and manufacturing.
What should you do when the letter arrives?
Note the deadline
HMRC gives a date to reply. If you need more time, ask for it in writing before the date passes.
Gather the claim pack
The submitted claim, the AIF, the technical report, cost workings and any engagement letter with the original adviser.
Get a specialist view
An independent specialist will tell you how strong each project and cost line is before you reply.
Reply accurately
Answer what is asked, with evidence. Do not guess, and correct anything you now know to be wrong.
What does enquiry support include?
- Reading the claim and correspondence and assessing risk project by project
- Drafting replies to HMRC's information requests
- Preparing your technical leads for meetings and attending with them
- Rebuilding cost apportionment where the original method was weak
- Negotiating adjustments and discussing penalty mitigation
- Advising on appeals or alternative dispute resolution if agreement is not reached
How are enquiry fees charged?
Enquiry support is usually charged on a fixed fee or time basis, because the outcome cannot be predicted. If the original adviser included enquiry support in its fee, check the engagement letter before paying anyone else. If you are switching, ask the new specialist for a written estimate for each stage.
How can you lower the risk of future enquiries?
You lower future risk by keeping project records as you go, describing projects by their technical uncertainty, being consistent between years and taking care with the intensity test, overseas costs and contractors. HMRC's targeted advance assurance service can also give certainty on specific points before you claim.
What does an HMRC R&D letter usually ask for?
An HMRC R&D compliance letter usually asks for a mix of technical and financial information. Typical requests include:
- A description of each project: the baseline, the advance sought and the uncertainties
- Who the competent professionals were and their qualifications or experience
- Evidence the work happened: plans, test records, code history, reports
- How staff time was apportioned, with timesheets or the method used
- Contractor and externally provided worker agreements, and where the work was done
- A reconciliation of claimed costs to the accounts
- Details of the agent who prepared the claim and their fee basis
How long does an R&D enquiry take?
An R&D enquiry can take a few months for a straightforward claim with good records, or a year or more where HMRC disputes whether projects qualify. Responding fully and on time is the single biggest factor you control. Partial answers usually lead to further rounds of questions.
What outcomes are possible?
| Outcome | What it means | What you can do |
|---|---|---|
| Claim accepted | HMRC closes the check with no changes | Keep the papers and carry on |
| Partial adjustment | Some projects or costs are removed | Agree, or provide more evidence on disputed items |
| Claim refused | HMRC decides none of the claim qualifies | Request a statutory review or appeal to the tribunal |
| Penalty | HMRC decides an inaccuracy was careless or deliberate | Argue reasonable care, disclosure and cooperation to reduce it |
How are penalties worked out?
Penalties for inaccurate returns depend on the behaviour behind the error and how the error came to light. Careless errors carry lower penalties than deliberate ones, and penalties are reduced substantially when you tell HMRC about a problem before it finds it and help it put things right. If the company took reasonable care, for example by using a competent adviser and reviewing the claim, there may be no penalty at all. A specialist will help you present the facts that support reasonable care.
What if your original adviser has gone out of business?
If your original adviser has gone out of business or stopped responding, you can still defend the claim. A new specialist will rebuild the evidence from your own records and staff. Ask HMRC for a short extension if you need time to appoint someone. Your company remains responsible for the return, so it is better to engage than to leave the letter unanswered.
Can you avoid an enquiry altogether?
No claim is immune from checks, but you can reduce the risk. Describe projects by technical uncertainty, keep records during the year, be consistent between years, handle overseas and contractor costs carefully, and use HMRC's targeted advance assurance for uncertain points. Claims prepared quickly from questionnaires with no technical interview carry the highest risk.
How can a specialist help before the first reply?
Before the first reply goes to HMRC, a specialist can read the whole claim, identify the weakest projects and costs, and agree with you which points to defend and which to concede. A clear, consistent position from the start usually shortens the enquiry.
Frequently asked questions
Why has HMRC opened a check on our R&D claim?
HMRC checks a share of claims at random and selects others on risk factors, such as large changes from previous years, sectors with high error rates, missing project detail or adviser history. A check does not mean HMRC has decided the claim is wrong.
Can we switch adviser during an enquiry?
Yes. You can appoint a new agent at any stage. The new specialist will need the original claim, all correspondence with HMRC and the working papers.
Will we face penalties?
Penalties depend on whether an inaccuracy was careless or deliberate and how much help you give HMRC. Taking reasonable care when the claim was made, and disclosing problems promptly, can reduce or remove penalties.
Can we withdraw a claim we now think is wrong?
You can amend or withdraw a claim, and HMRC treats unprompted disclosure more favourably than errors it finds itself. Take advice first so the amendment is accurate.
Get matched with a vetted R&D tax specialist
Tell us what you do and roughly what you spend on development. We check the basics, then introduce you to a specialist from our panel whose sector experience fits your work.
- Free to use, with no obligation to appoint anyone
- Introductions only to firms that meet our panel criteria
- Fee terms in writing from the firm before you sign anything
- We flag claim deadlines we can see from your answers
Our matching service is free for businesses. Specialist firms on our panel pay us a fee when we introduce a business to them. That fee does not change the price a firm quotes you, and you are never obliged to appoint anyone we introduce.