Being selected for an HMRC enquiry into your R&D claim can be a daunting and stressful experience. But with the right preparation and support, it does not need to be. In this article, we explain what to expect from an HMRC enquiry, and how our specialist team of accountants and tax advisers can guide you through the process to achieve the best possible outcome.

What Triggers an HMRC Enquiry?

Most tax returns and claims, including those for Research & Development Tax Credits, are processed without any detailed checks from HMRC. But occasionally they will select returns for further scrutiny through an enquiry. This may be triggered by unusual figures, complexity in claims, random sampling or if HMRC have specific risk concerns. By taking due care in preparing your returns and claims accurately, with robust supporting documentation, you can minimise the risks of being selected. But even if your tax affairs are wholly above board, there is always the possibility of being selected for an HMRC review.

The Enquiry Process Step-By-Step

If HMRC do open an enquiry, they will typically follow these key stages:

  1. Issuing a formal Notice of Enquiry letter, specifying the areas they want to investigate
  2. Asking detailed questions about your activities, figures and records over a period of months
  3. Requesting extensive supporting evidence to verify positions taken
  4. Potentially arranging face-to-face interviews to query senior staff
  5. Negotiating the acceptance and/or adjustment of claims
  6. Agreeing the final position and closing the enquiry

Initially, we will leverage our extensive experience to construct persuasive arguments articulating the validity of your claim to HMRC directly. Our aim is always to reach an agreement without needing formal appeals. However, if required, we can escalate matters through the tax tribunal system to protect your claim’s legitimacy. Our defence services cover the full spectrum of legal processes – from Alternative Dispute Resolution and Statutory Review, right up to representation at a First Tier Tax Tribunal hearing if necessary.

What To Expect – And How We Can Help

Dealing directly with HMRC during drawn-out enquiries, and unravelling complex tax positions to their satisfaction, can be frustrating and hugely time consuming. But by engaging our R&D team here at Crowthers Accountants, we will handle the entire process for you – working towards the most positive outcome in the quickest timescale possible. Our broad scope of enquiry support includes:

  • Reviewing all correspondence and line of enquiry focus areas;
  • Managing all ongoing information requests and communications;
  • Liaising with your expert technical staff to collate any additional information required;
  • Collating and submitting comprehensive evidence files;
  • Develop strong technical arguments to justify treatment of claims;
  • Interpreting tax law technicalities to justify positions adopted;
  • Prepare senior staff for HMRC interviews;
  • Negotiate firmly but pragmatically to close the enquiry. We appreciate the delicate balance between defending legitimate arrangements and reaching pragmatic resolutions if errors or oversights have unfortunately occurred.

By calling on our R&D team from the outset, you can focus your time on business priorities, safe in the knowledge that your case is being managed by experts.

Get in Touch For Support

If you’ve received that dreaded HMRC letter about an enquiry, contact our team today to find out how we can guide your business through the process. With extensive expertise and experience on your side, we’ll handle all aspects of robustly demonstrating your tax compliance – resolving HMRC’s questions as quickly and positively as possible.

Our expert R&D team is led by Sara Crowther, who has over 15 years’ experience with R&D Tax Relief claims. Sara holds a Law degree, providing invaluable expertise for strengthening enquiry-defence arguments. Sara’s specialised team have built a strong reputation for constructing robust rebuttals to justify R&D treatments, alongside negotiating with tax inspectors to achieve positive outcomes. With extensive knowledge and proven experience justifying R&D tax positions, our team can skilfully handle all HMRC information requests, submit comprehensive evidence, and develop persuasive technical arguments to protect your claim.