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Nearly 50% of last month's R&D claims invalidated by HMRC
22 September 2023
Recent adjustments to the submission process for R&D tax relief claims in the UK have caught many companies off guard. And the consequences are significant, with nearly half of all claims submitted since August 8th being declared invalid by HMRC.
What led to claims being invalidated by HMRC?
The root cause of claims being invalidated by HMRC lies in the new documentation requirement introduced by HMRC 4 weeks ago. As of August 8, 2023, all R&D relief claimants are required to complete an Additional Information Form (AIF) alongside their claims. The AIF includes details of qualifying expenditure and contact details for the main R&D contact at the company and any agent involved in the claim. Failure to include this form renders the claim invalid.
What does this new wave of HMRC invalidating claims mean to claiming businesses?
HMRC has started sending letters to the companies that have failed to complete the new forms, notifying them of the invalidity of their R&D claims unless they take prompt action and revise their submissions. While some companies will manage to amend their submissions before the deadline, others might not have the time or resources to resubmit the paperwork and, as a result, may lose their claim altogether.
What can you do to reduce the risk of HMRC invalidating you claim?
- an AIF is submitted before any R&D relief claim, and
- that you comply with the other changes to the submission process that took effect in 2023.
Your best strategy for success
This increased level of complex reporting may challenge businesses and their accountants. You could face difficulties accurately capturing and presenting the required information, potentially leading to incomplete or incorrect submissions. In the ever-changing landscape of R&D tax relief, staying informed and having an expert by your side can make all the difference, and ensure your claims are compliant, optimised, and risk-free.
At Visiativ, we possess the unique skillset of technical know-how and an in-depth knowledge of HMRC’s R&D tax relief legislation. This allows us to conduct a hassle-free and successful claim process by:
- Using our extensive claim experience, accumulated over many years, to optimise claims across various industries.
- Preparing the required technical reports in the format that aligns with HMRC’s interpretations of the guidelines.
- Defending your claim should HMRC have any questions.
What can Visiativ do for you?
- The format required for the AIF is not new to us – we have always worked this way, so perfectly positioned to cope with the change. We will walk you through the process from start to finish, explaining what projects and activities are claimable, and just as importantly, which projects are not.
- We will construct a narrative for eligible projects that align with the criteria requested in the AIF and gather information for all eligible activities.
- We will make sure all eligible costs are analysed, separated and presented in the correct format, and are fully defendable.
- We will submit the AIF so your accountant can complete the CT600.
- We will project manage and robustly respond to any HMRC enquiry.
If you have any questions relating to R&D tax relief or wish to discuss the implications of recent changes to the R&D tax relief scheme on your own claims, please get in touch with VISIATIV, and a representative will get back to you to discuss your unique needs and explain how we can assist.
