HMRC suspects the UK’s largest companies of owing £725m in underpaid tax in the last year because of overclaiming R&D tax relief, says national accountancy group UHY Hacker Young. That represents a 16% jump on the £623m in tax HMRC suspected was underpaid in the previous year.
HMRC are also concerned at R&D claims made by SMEs but cannot yet put a figure on it and is particularly focused on the dubious R&D tax relief claims submitted by unregulated agents who often work on a ‘no win/no fee’ basis, and therefore encourage companies to claim far more tax relief they are entitled to.
A further tightening of the rules will come into force next year. Claims will need to be endorsed by a named senior officer of the company making the claim and companies planning to make a claim will have to flag this in advance with HMRC and provide more detail on the R&D undertaken. Companies will also have to provide details of any agent who has advised the company in making the claim. HMRC has already allocated 100 additional compliance officers to assess R&D tax relief claims.
Kevin Edwards, tax partner at UHY Hacker Young says: ‘HMRC now has a laser focus on what it sees as spurious R&D tax relief claims. Submitting an R&D claim is going to get a lot trickier as HMRC looks to clamp down on error and fraud.’
HMRC suspects the UK’s largest companies of owing £725m in underpaid tax in the last year because of overclaiming R&D tax relief, says national accountancy group UHY Hacker Young. That represents a 16% jump on the £623m in tax HMRC suspected was underpaid in the previous year.
HMRC are also concerned at R&D claims made by SMEs but cannot yet put a figure on it and is particularly focused on the dubious R&D tax relief claims submitted by unregulated agents who often work on a ‘no win/no fee’ basis, and therefore encourage companies to claim far more tax relief they are entitled to.
A further tightening of the rules will come into force next year. Claims will need to be endorsed by a named senior officer of the company making the claim and companies planning to make a claim will have to flag this in advance with HMRC and provide more detail on the R&D undertaken. Companies will also have to provide details of any agent who has advised the company in making the claim. HMRC has already allocated 100 additional compliance officers to assess R&D tax relief claims.
Kevin Edwards, tax partner at UHY Hacker Young says: ‘HMRC now has a laser focus on what it sees as spurious R&D tax relief claims. Submitting an R&D claim is going to get a lot trickier as HMRC looks to clamp down on error and fraud.’
