Date posted: 20th Jan 2025
HMRC have launched a new disclosure service aimed at companies that may have overclaimed R&D tax relief in previous years.
The service has been introduced due to the significant levels of errors made in R&D claims being discovered by HMRC. A HMRC publication suggests that non-compliance in the R&D relief regime has cost an estimated £1bn for 2020/21.
The disclosure follows on from HMRC targeting companies that have made R&D claims and seeking to disallow the relief. In some cases, it is clear cut that the company should never have claimed R&D tax relief but in others, it is not so obvious, but HMRC are still, in our view, incorrectly penalising companies with legitimate R&D claims.
The HMRC disclosure service can be used where:
- The company is out of time to withdraw or amend their R&D claim under normal statutory time limits.
- The company’s behaviour was not deliberate – i.e. they did not deliberately claim too much relief.
The benefit of using the disclosure service is to reduce any penalties charged by HMRC. By using the disclosure service before HMRC discover anything untoward, will mean that any penalties will be regarded as “unpromoted” and therefore HMRC will reduce any penalties imposed compared to if they discover any errors.
The disclosure portal can be found at https://www.gov.uk/guidance/tell-hmrc-if-youve-claimed-too-much-research-and-development-rd-tax-relief
We would urge anyone considering such a disclosure to take professional advice in advance of any submissions to HMRC.
As ever, we are here to help.
