If you’re seeking advice on an outstanding enquiry, our team are here to support.
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An R&D tax enquiry is a formal review by HMRC into a company’s R&D tax relief claim.
HMRC may open an enquiry for a range of reasons. These can include random compliance checks, sector-specific reviews, inconsistencies in a company’s tax return or where the technical narrative does not clearly demonstrate how the work advances science or technology. In recent years, HMRC has increased scrutiny across all R&D claims as part of wider compliance activity.
HMRC typically requests both technical and financial evidence. This may include detailed project descriptions, explanations of the scientific or technological uncertainties addressed, competent professional involvement, staff timesheets, cost breakdowns and supporting documentation such as project plans, test results, or design iterations. For our existing clients, claims are prepared with the possibility of an enquiry in mind. Initial reports are structured to include comprehensive technical narratives and detailed cost justifications, ensuring that appropriate evidence is already documented and readily available should HMRC raise questions.
HMRC may ask questions or request further documentation to confirm that the activities claimed meet the legislative definition of R&D and that the costs included are accurate and eligible. An enquiry does not automatically mean there is an issue with the claim, it is part of HMRC’s compliance process.
A £320,000 software design and build claim was fully approved after an ADR process, with HMRC concluding their eight-month enquiry.
An extreme sports product design claim, totalling £59,000 across nine projects, was successfully accepted via ADR, with HMRC completing their nine-month review.
A £34,000 new product development claim for a client in the scientific measuring sector was fully approved by HMRC’s Campaigns Team just four months after the enquiry opened, following our second response letter.
A £78,000 claim for temporary structural system design across three construction projects was accepted following ADR and appeal, with HMRC concluding the twelve-month enquiry.
If HMRC decides to open an enquiry into an R&D tax relief claim, the company will receive formal correspondence from them outlining the nature of the enquiry. This letter typically specifies the areas under review and any additional documentation or information HMRC requires. At this initial stage, our team reviews the correspondence with you, explaining its implications in plain terms and will advise on the most appropriate next steps to ensure a structured and timely response.
During the enquiry meeting, we will: Gather all necessary information and documentation from your team Review the specifics of HMRC’s points of concern Strategise on the most effective response, combining both technical and financial perspectives Our specialists work closely with key stakeholders to assess any further qualifying R&D evidence, requested by HMRC. These focused enquiry workshops ensure that any technical and financial queries are covered comprehensively and tailored to address the enquiry effectively.
If the issue remains unresolved, after submitting responses to HMRC’s points of contention then Alternative Dispute Resolution (ADR) is prioritised, should communication with HMRC breakdown. Further communication or calls with HMRC may also be necessary to address outstanding issues. Should HMRC still disagree with the claim at this stage, our resolutions team will assist in lodging an appeal, to ensure our clients are robustly defended and mitigate the need for a tribunal proceeding. On a case-by-case basis, however, a tribunal may be required.
Once the enquiry is resolved, a case closure notice is issued. This document confirms that the enquiry has been concluded and outlines any final decisions or actions taken.
