HM Revenue and Customs (HMRC) has recently taken steps to crack down on fraudulent Research and Development (R&D) tax credit claims, including the delay of claims and even legal action in some cases. HMRC had previously confirmed in the Budget that it was setting up a specialist R&D Anti Abuse Unit to tackle cases of suspected false and fraudulent claims, however this unit is still being staffed and it could be some time before it is operational.
Recent reports suggest that the level of fraud or error within R&D claims amounted to £469million in 2021/22 compared to £336 million in 2020/21. In view of this, HMRC has decided to take immediate steps.
HMRC’s Fraud Investigation Services unit has sent letters to suspected abusive claims, requesting more information to help verify them as being authentic. WLH Tax has had sight of this letter and professional advice is recommended in view of the serious nature of HMRC’s stance.
HMRC states:
“We have recently seen some concerning claims. To prevent abuse of the Research & Development relief and protect legitimate customers, we have conducted additional checks.
We have not written to R&D claimants accusing them of fraud. These letters state that we have not opened a criminal investigation into suspected fraud but reserve the right to do so.
Where evidence leads us to believe that fraudulent claims may have been made, we will issue these letters which ask for more information to help verify the claims.”
The letter invites recipients to get in touch with HMRC within 30 days if they believe their claim is genuine. It warns that anything the recipient might say to HMRC about their claim could be used as evidence in respect of any future criminal investigation.
Should you have any concerns regarding this matter, please do not hesitate to get in touch for a free and confidential discussion.