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HMRC enquiry defence for R&D claims

A compliance check into an R&D claim is a demand to evidence what was filed: the projects against the statutory definition, and the costs against the records behind them. We take those on as standalone engagements, including claims other advisers prepared. We start by forming a view on whether the claim can be defended. Where it can, we defend it. Where it cannot, we say so, early enough for that to be worth something to you.

If we prepared your claim, this is not the page you need. Enquiry support is included as standard in every LimestoneGrey engagement, written into the engagement letter rather than offered as goodwill: handling the response to a compliance check is part of the engagement. What follows is for companies whose claim someone else prepared, and for anyone instructing us on an enquiry alone.

What we do when HMRC opens an enquiry into your claim

The work is correspondence-stage defence: the written case put to HMRC, the evidence assembled behind it, and the dealings with the caseworker holding your file.

That starts with reading the claim as filed before answering anything: the first response sets the scope and the tone of everything after it. Information requests can be broad, and part of a good defence is settling a sensible scope rather than sending everything and hoping. The technical case then goes back in the form the legislation asks for — an advance in a field of science or technology, uncertainties a competent professional could not readily resolve, the reasoning of the people who did the work — with the cost workings reconciled to the accounts. A competent professional, in HMRC’s sense, is the engineer or scientist who led the work and can explain why it was hard. Your competent professionals are prepared to answer HMRC directly, because HMRC may want to hear from them rather than only from an adviser.

We say defensible rather than guaranteed. No honest adviser can promise you an outcome with HMRC, and a firm that offers you one has told you something useful about itself.

Claims we did not prepare

Enquiries into claims we did not prepare are a standing part of the work, and some arrive because the firm that filed the claim is no longer around to answer for it.

We do not take on every case. The first step is a conversation about HMRC’s letter and what was claimed, which costs nothing and usually tells us both whether this is worth taking further. Where the claim needs reading properly before anyone can honestly say which parts are defensible, which are weak and which should be conceded — the norm on a large or untidy claim — that assessment is a fixed fee, agreed before it starts. We tell you where we land either way.

A claim with real technical substance and untidy evidence is usually worth defending; untidy evidence is the ordinary condition of a company that was busy doing the work. A claim written for the file by someone who never spoke to the engineers is a different proposition. Where part of a claim is wrong, conceding that part early is normally the cheapest route available, because the quality and timing of disclosure affects any penalty: coming forward promptly and cooperating fully reduces the amount, and holding out does the opposite. What penalties HMRC can charge sets out how the amount is arrived at, and can HMRC make me pay back an R&D tax credit? covers repayment and interest.

LimestoneGrey is a member firm of both the Chartered Institute of Taxation and ICAEW, regulated by ICAEW, bound by the Professional Conduct in Relation to Taxation code, supervised by ICAEW for anti-money laundering and registered with HMRC as a tax adviser. Telling a company that its claim will not hold up is what those obligations are for. There is a market that will take any brief and bill for the argument. We are not in it.

One point specific to older periods. For accounting periods beginning before 1 April 2024, two First-tier Tribunal decisions — Collins Construction and Stage One Creative Services — changed the position on subsidised and contracted-out expenditure, and HMRC updated its guidance manual in early 2025 rather than appealing. If your enquiry turns on those grounds, that history is part of your defence.

How a defence actually runs

Five stages, in practice: an opening letter setting questions and a deadline; a round of information and documents; written questions testing the technical case, sometimes with a call or meeting involving your competent professionals; HMRC’s view, which is acceptance, adjustment or rejection with reasons; then resolution, by agreement or escalation. Our guide to HMRC R&D enquiries walks each stage through, and what HMRC asks for lists the evidence requested.

Timing is months rather than weeks. There is no fixed timetable, correspondence moves in rounds with weeks between letters, and contested cases can run well beyond a year. While a check is open, any payable credit for the period is unlikely to be paid, so the practical cost is cash flow and management time even where the claim survives intact. None of this is unusual now: HMRC checked around one in six R&D claims in 2023-24, its latest published figure.

How far we take it

If a case is not resolved by agreement, three routes exist beyond the correspondence stage: a statutory review by an officer not previously involved; alternative dispute resolution (ADR), where an HMRC officer trained in mediation acts as a neutral mediator between you and the case officer; and an appeal to the First-tier Tribunal. We will tell you plainly where a case sits and what each route would involve.

Most enquiries are settled in correspondence, and that is where our work is concentrated. Appeals to the tribunal are rare, and we do not hold ourselves out as litigators. If a case looks like heading that way we will tell you early and set out the options with you, which may mean working alongside specialist litigators or handing over a file they can pick up cleanly. It is a decision we take with you, and we scope that work separately if it arises.

What it costs

Fees are agreed before any work starts. Enquiry defence is scoped from HMRC’s letter and the claim as filed rather than quoted blind, so the first step is a conversation, which costs nothing and commits you to nothing. Reading the claim itself is the assessment, and on anything sizeable that is a fixed fee agreed before it starts. If a case moves past correspondence into a statutory review, ADR or beyond, that further work is scoped and agreed separately, before it begins rather than after.

What to bring to a first conversation

Five things, none of which needs assembling first:

  • HMRC’s letter, with its date and any deadline it sets.
  • The claim as filed: the Additional Information Form setting out the projects and costs, the computations and any technical report.
  • Who prepared it, and whether that firm is still involved.
  • The competent professionals behind each project, and whether they are still with the company.
  • Whatever the projects generated while they were running — notes, plans, test results, commits.

Gaps are not a reason to delay the call. What is missing is part of the assessment.

If the letter has arrived

The opening weeks matter disproportionately, because the first response frames the scope and often the outcome. If a compliance check letter about an R&D claim has arrived, whoever prepared it, get in touch and we will tell you straight where you stand.

If no enquiry has arrived and you would like to know how a filed claim would hold up, our free claim review is a confidential second opinion, including on claims prepared elsewhere. If you are choosing who prepares your next claim, what we do and how we work sets out the engagement end to end.

Call 0330 223 4 223 or send us a message.

Sources

Written by Matthew Jones ACA CTA. Last reviewed August 2026.

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