HMRC enquiries can take a lot of time and resources, potentially causing delays in receiving your tax credits and disrupting business operations. This extra scrutiny can also lead to adjustments in the claim value or, in some cases, hefty unexpected penalties if they find discrepancies or non-compliance issues in your claim.
All in all, it’s a potentially very stressful process, but you can successfully navigate an HMRC enquiry by partnering with an R&D tax specialist, or better yet – avoiding one altogether.
An HMRC R&D enquiry is a process where HMRC requests additional information to clarify questions they have about your R&D tax credit claim. This usually involves a detailed review of the claim documents. The enquiry aims to ensure the proper distribution of government funds and prevent abuse of the R&D tax incentives scheme. Sometimes, HMRC may process a claim before opening an enquiry, which could lead to a request for repayment if the claim is found invalid. So, just because the cash is in your account, or you have paid a reduced amount of tax, there is no guarantee that this money won’t be reclaimed. HMRC have up to 15 months from the date the tax return was submitted to open a compliance check, so getting the claim right first time is crucial to further protect this.
HMRC may initiate an R&D enquiry to verify the accuracy and eligibility of tax credit claims, ensuring they comply with tax laws and guidelines. There are several ‘red flags’ that might encourage HMRC to investigate your claim further:
This process is part of HMRC’s duty to ensure the correct allocation of R&D tax incentives and to prevent system abuse.
Yes, there has been an increase in R&D tax enquiries. In the 2023 to 2024 tax year, there were 46,950 R&D tax credit claims submitted, marking a 26% decrease from the previous year. This data indicates that while the number of claims has dwindled, HMRC’s scrutiny to ensure compliance and accuracy in the submissions can now become more targeted. There has been a recent focus in 2026 that has seen HMRC move away from their volume compliance approach to more targeted compliance checks, such as high-value claims, complex subcontracting scenarios, and how R&D impacts other tax reliefs. Despite this, however, HMRC’s Mandatory Random Enquiry Programme (MREP) is still in full swing, meaning your claim might be randomly selected for investigation by an officer or inspector at HMRC.
While the news may not have you jumping for joy, the increased scrutiny of R&D tax credit claims by HMRC can be positive as it ensures only valid and accurately reported activities receive tax relief. This maintains the tax system’s integrity, deters fraudulent or exaggerated claims, and helps allocate government incentives more effectively to genuine innovation. This increase in scrutiny underscores the R&D tax credit programme’s credibility, benefiting companies making legitimate claims by protecting the scheme’s sustainability and ensuring ongoing support for R&D activities.
An HMRC R&D compliance check will thoroughly examine the specifics of the R&D tax credit claim to ensure it accurately reflects genuine research and development activities defined by tax legislation. This detailed scrutiny aims to verify that claimed activities are indeed eligible for tax relief, that reported expenditures directly relate to these R&D efforts, and that all claims adhere strictly to the tax laws. Enquiries often require you to provide comprehensive documentation and explanations, including project reports, financial records, and evidence of technological advancements or challenges addressed through the R&D work. This is why it’s best practice for you and/or your adviser to put the work in upfront, ensuring your claims are supported by comprehensive evidence of your R&D activities.
Common mistakes in R&D tax credit claims include;
Over-claiming for activities that don’t meet HMRC’s criteria
Under-claiming due to a lack of understanding of eligible costs
Misinterpreting the guidelines
Failing to provide sufficient evidence to support the claim
Inaccuracies in financial calculations.
These errors can lead to enquiries or penalties, emphasising the need for thorough documentation and a clear understanding of HMRC’s requirements. This is why it’s often best to outsource to a professional who understands R&D tax regulation and how this will apply to R&D projects you undertake. It will reduce the risk of facing an enquiry and allow you to get on with what you do best – running your business.
If you’re already facing an HMRC R&D enquiry, responding promptly and accurately to their requests is crucial. Gather all the requested documentation and information to support your claim, review your submission for any potential inaccuracies, and consider seeking advice from an R&D tax credit specialist to navigate the process. Cooperation and transparency with HMRC throughout the enquiry can facilitate a more favourable resolution.
If an R&D tax adviser submits a claim on your behalf, they should stand by their work and manage this process for you. However, not all advisers are confident enough or willing to defend a claim if it’s questioned. This is a big red flag, so ask an adviser how they’d respond to an enquiry before agreeing to their terms.
Facing an HMRC enquiry is a daunting experience, especially if an unscrupulous adviser has left you high and dry. As of June 2026, less than 2% of Wilby Jones submissions are questioned; if they are, we will back our work 100%. Our Tax Dispute team has the expertise and knowledge to support you through your HMRC enquiry, with experts in several fields who are also confident in HMRC processes. You don’t have to face this challenge alone; speak to one of our experts today.