What R&D claimants need to know about HMRC’s new focus on compliance

The latest HMRC Research & Development (R&D) Communication Forum (RDCF) meeting suggests that the UK's R&D tax relief regime has entered a new phase. Following several years of significant reform, the focus is now less on legislative change and more on improving administration, claim quality and compliance.

For businesses making R&D claims, the message is clear – while the rules may be stabilising, HMRC's expectations around accuracy and supporting information continue to increase.

A period of stability

One of the key takeaways from the forum was that no major legislative changes are currently planned following the introduction of the merged RDEC regime and the Enhanced R&D Intensive Support (ERIS) scheme.

Instead, HMRC and HM Treasury emphasised the importance of providing certainty for businesses investing in innovation, while continuing efforts to reduce error and fraud within the regime.

Faster processing times

HMRC reported that around 90% of R&D claims are now being processed within 40 days, exceeding its target of 85%. This is encouraging news for businesses that rely on R&D tax relief as part of their cash flow planning. Although more complex claims may still face additional scrutiny, the overall trend points towards improved operational performance and a more efficient claims process.

The forum also highlighted an interesting shift in claim activity. Claim numbers have fallen from around 61,000 to 51,000, while the total value of support provided has increased from £7.7 billion to £8.2 billion.

This suggests HMRC is dealing with fewer claims overall, but a greater proportion of higher-value submissions. It also reflects the impact of recent compliance measures, which appear to have reduced lower-quality or speculative claims entering the system.

Increased focus on targeted compliance

HMRC confirmed that its compliance approach is continuing to evolve. Rather than broad campaigns, resources are increasingly being directed towards higher-value and more complex risks.

For claimants, this reinforces the importance of preparing robust technical narratives, maintaining supporting evidence and ensuring expenditure calculations are accurate. While genuine claimants should benefit from a more targeted approach, poorly prepared claims are likely to attract greater attention.

The growing importance of the Additional Information Form

The Additional Information Form (AIF) remains a key area of focus for HMRC. The forum noted that errors continue to be identified in submissions, including incorrect selections and calculation mistakes. The AIF has also been expanded in certain circumstances to capture additional information, including State Aid declarations and details relating to different relief regimes.

Businesses should therefore view the AIF as more than an administrative requirement. The information provided must align with the claim calculations and technical narrative, as inconsistencies may increase the likelihood of HMRC enquiries.

The overall message from HMRC is one of stability, but with an increasing emphasis on delivery, accuracy and data quality.

As compliance activity becomes more targeted and the AIF continues to play a central role in the claims process, businesses should focus on ensuring claims are well supported, technically robust and submitted with accurate information from the outset.

Whether your business is already making R&D claims or is considering whether a recent project could qualify, early advice can help you understand the opportunity and avoid common pitfalls. For more information and guidance, contact Monahans to see how we can help.’

Charlotte Parker