Taxman challenges firms capitalising on more generous R&D credit regime

The taxman is clamping down on companies looking to capitalise on a more generous research and development (R&D) tax credit regime.

HM Revenue & Customs (HMRC) has disputed £425m in R&D credits over the last year, up from £90m in the previous 12 months, according to law firm Pinsent Masons.

The rise comes after a more generous Research and Development Expenditure Credit Scheme was introduced. Total R&D tax support has risen by 20% to £2.9bn, according to the latest available figures.

“With a rise in the number of R&D claims made by large firms, partly because of changes to how they can claim relief, HMRC is reviewing these claims more carefully,” said Pinsent Masons partner Ian Hyde. “Despite HMRC claiming the tax claims are being investigated, it does not mean that the credits are not due. £400m is the headline figure that they estimate may not have been properly claimed. The amount of credits that HMRC will actually deny as a result of its investigations will be significantly lower.”

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