There is no set timeline for the resolution of an HMRC enquiry; it will continue until all reasonable concerns of the Inspector have been addressed. As a result of this, RCK Partners’ enquiry defence fee structure is primarily contingent upon the enquiry being successfully concluded. However, typically we see claims resolved within 6-9 months.

At the earliest opportunity, you should reach out to your R&D services provider, or independent experts, in order to ensure you understand all information that HMRC has requested and to discuss the potential risks at each stage. Timely responses, presenting the technical elements of the claim within the boundaries of the R&D guidelines, are essential for the successful resolution of any enquiry.

- Examination of claim documents and existing enquiry correspondence
- Scoping call and risk analysis
- Managing all correspondence with HMRC across multiple letter exchanges and potential calls with the Inspector
- Claim resolution and penalty mitigation.

The best-case scenario will result in the case officer accepting that the projects detailed in your claim are eligible under the R&D guidelines, resulting in the total amount of qualifying expenditure that was submitted being approved. In the worst case, the projects will be deemed to not be eligible, even after appeal. In those cases, none of the qualifying expenditure will be approved and the Inspector will be required to consider penalties for careless or inaccurate submission of tax returns.

Our experience varies on a case by case basis, and the result is dependent on the underlying quality of work put forward. Where clients have submitted a claim to HMRC in good faith, even if the Inspector concludes against allowing the claim, our experience is that we can work with HMRC to agree a way forward that does not result in the payment of penalties, provided that the claimant commits to understanding and abiding by HMRC guidance going forward.

Eli Gottlieb is RCK Partners’ Head of Risk and Compliance who oversees all Claim Resolutions with the support of the in-house Compliance Team.

A distinct process, Fraud Investigation Service (FIS) letters are similar to enquiry letters, although they tend to be more focused on the financial costs incurred in comparison to R&D Enquiries. RCK Partners’ Claim Resolution Service is open to assist with both R&D Enquiries, and FIS letters.

Absolutely, RCK Partners’ dedicated Capital Allowances team work closely with the Compliance team on all Capital Allowances enquiry responses.

When faced with an enquiry, our experienced Capital Allowances team guides you through the process, ensuring timely responses and adherence to Capital Allowance Tax relief guidelines. Our fee structure is contingent upon successfully resolving the enquiry, providing you with peace of mind. We examine claim documents, conduct scoping calls, and manage correspondence with HMRC, aiming for the best outcome. Whether it’s gaining approval for qualifying expenditure or addressing specific concerns, we’ll support you in navigating these complexities with confidence.

Inspectors are obliged to consider applying penalties in any situation in which the claim value is reduced over the course of the enquiry. Penalties can be up to 30% of the tax due in cases where the submission is deemed to be careless, between 20% and 70% for submission of deliberately incorrect information, and between 30% and 100% where the claim is deemed to have been deliberately incorrect and concealed.

Penalties can be reduced or mitigated entirely depending on multiple factors, including open and timely responses to HMRC and assisting in calculating any changes in tax due. RCK Partners will advise on all stages of enquiry response with a view to reducing the risk of incurring penalties, where it is reasonable and possible to do so.