What is an R&D tax enquiry?
An R&D tax enquiry is HMRC’s review process to check that a company’s R&D tax claim is accurate and compliant. HMRC sometimes call this process a compliance check. It can apply to claims under any scheme, including the merged RDEC-style regime and the ERIS scheme.
An R&D tax credit enquiry isn’t necessarily a sign that your R&D claim is incorrect. HMRC may simply want more detail about a project, the costs involved, or how the work qualifies under the R&D guidelines.
In practice, this means HMRC will ask questions and may request supporting evidence. Some enquiries need only a short clarification. Others develop into detailed technical and financial discussions.
Either way, HMRC wants to verify two key things. First, that the activities meet the definition of R&D for tax purposes. Second, that you claimed the costs correctly.
What triggers an HMRC R&D enquiry?
HMRC selects a proportion of R&D claims for compliance checks. This helps confirm that claimants are applying the legislation and guidance correctly. It also helps ensure HMRC does not pay excess relief for work that doesn’t qualify as R&D. These are random compliance checks as part of HMRC’s routine review process and receiving one does not mean your claim is incorrect.
Other common reasons HMRC opens a case include:
- Technical narratives that don’t clearly show the scientific or technological uncertainty
- Cost calculations that are hard to trace back to specific projects
- Claims that sit outside the sector or size profile HMRC expects
Claims are now being checked far more closely than they used to be historically. Currently, only the Wealthy and Mid-Sized Business Compliance (WMBC) team at HMRC raises enquiries. This has not always been the case.
Over the last few years, the Individuals and Small Business Compliance (ISBC) team ran a volume compliance campaign. This opened a significant number of R&D enquiries. HMRC often raised these enquiries based on the claimant’s industry, identified by their SIC code. HMRC believed certain industries were less likely to carry out R&D activities.
HMRC usually sends enquiry correspondence by letter to both your business and your advisor in the first instance.
Other types of R&D enquiry
HMRC can open an aspect enquiry, focused specifically on the R&D claim. They can also open a full enquiry into the whole Corporation Tax Return. Regardless, during an enquiry, HMRC will ask questions and may request supporting evidence.
It may require some straightforward additional details, or it could lead to more detailed technical and financial discussions. HMRC’s aim is to confirm that the activities meet the definition of R&D for tax purposes, and that you claimed the costs correctly.
Not every HMRC letter is a formal enquiry either. HMRC can also sends “nudge letters” to claimants. These are lighter touch prompts asking you to review the claim yourself, rather than opening a full compliance check.
Read any HMRC correspondence carefully to understand what HMRC is asking. It may also be worth seeking further advice.
You may also receive a letter from HMRC’s Fraud Investigation Service (FIS). These letters can look serious. These are normally asking you to confirm that the costs included in your claim occurred and will ask for contracts, invoices and bank statements.
If I get an R&D claim enquiry, what do I need to do?
First, don’t panic, an R&D claim enquiry doesn’t automatically mean anything is incorrect. HMRC often asks for clarification or extra detail simply to understand a claim properly.
If you do receive one, the key steps are:
Read the letter carefully
In the letter HMRC will outline exactly what information they need. This could include further project details, technical explanations, cost breakdowns, or evidence of the work carried out.
Respond clearly and professionally.
Enquiries have deadlines. Your response should address each question directly, provide the right evidence, and explain the R&D activities in plain language.
Gather supporting documentation.
This may include project notes, prototype specs, testing records, timesheets, invoices, or emails. Anything that demonstrates the work and the costs.
Get expert support if needed.
An experienced adviser can help shape a strong response, reduce risk, and manage the conversation with HMRC on your behalf.
An R&D tax enquiry can be stressful, but our role is to remove that pressure and guide you through the process with confidence. Our team combines over 20 years of tax legislative expertise with genuine technical understanding of your projects. That means we can identify exactly how and why HMRC has challenged a claim, and how best to respond.
How we support your enquiry
1. Initial Review
Share your R&D claim and any letters you’ve received from HMRC and we’ll take the time to review everything carefully and quickly. The goal is to ensure that you’re not left wondering what is happening.
2. Position Assessment
We talk you through your position in clear terms, so you know exactly where you stand. We’ll explain what HMRC is looking for, what the risks are, and what your likely pathway to resolution looks like. That pathway could range from withdrawing the initial claim to proceeding all the way to Tribunal.
3. Understanding the Claim
We work closely with you to gather anything HMRC may need. This often means revisiting case studies with your technical team, pulling together project notes, or reviewing financial costings. This part is collaborative: we ask questions, you tell us about the work, and together we build a clear picture.
4. Initial Response
Once we have everything we need, we prepare the full technical and financial response. We draft the letters and handle all communication with HMRC. We also keep you up to date throughout the correspondence.
5. Responding to HMRC
If HMRC come back with further queries, we manage the back-and-forth on your behalf. Sometimes the quickest route to resolution is a direct conversation between HMRC and your technical team. If that happens, we prepare you in advance and support you through it.
6. Appeals, negotiation and resolution
Where appropriate, we can escalate through alternative dispute resolution (ADR) or support you through a formal appeal or Tribunal. At each step, we explain the risks and likelihoods so you can make confident, informed decisions.
Want to discuss your options?
- How long will it take to resolve the enquiry?
- A single, clear response resolves some HMRC R&D enquiries. Others take longer if HMRC asks follow-up questions or wants more detail. Timelines can also vary depending on which HMRC unit is handling the case and their current workload.
We will keep the process moving. We will respond promptly and update you at every stage. So even if the exact timeframe is uncertain, you will always know what to expect next. - How much of my time will it take?
- Each case is different, but we build our process to minimise your time where possible. Some enquiries need only a handful of clarifications. Others require more input, particularly where HMRC asks for deeper technical detail.
We can’t give a precise number of hours upfront.
Our goal is simple: minimise disruption and keep the process as smooth as possible for you.
- How do you structure your fees?
- We tailor our fees to each case. Every R&D tax enquiry is different, and our fees reflect the level of support you need. Our fees will always be flexible, fair and transparent.
If you would like a tailored estimate, book a call with our team. - What are the outcomes of the enquiry?
- We cannot guarantee a specific result. Some enquiries end with HMRC accepting the claim as originally submitted. Others lead to adjustments in the projects or costs included.
In some cases, you may withdraw the claim and negotiate penalties with HMRC as part of the resolution.
What we can promise is honesty throughout the process. We’ll explain the risks and implications clearly, and work with you to secure the best possible outcome for your business.