R&D tax relief •8 min read

HMRC R&D enquiries: what to expect and how we defend claims

MJ

Matthew Jones ACA CTA

Last reviewed July 2026

HMRC checks roughly one in six R&D claims, around 17%, with a compliance workforce of more than 500 staff dedicated to the relief. An enquiry is a formal compliance check into your claim: HMRC asks for evidence that the projects meet the statutory definition of R&D and that the costs behind the claim are right. Enquiries run for months rather than weeks, and outcomes range from acceptance in full to repayment with interest and penalties.

This page sets out the process honestly: what arrives, what HMRC asks, how long it takes and how it ends. It also explains what we do about it. Every LimestoneGrey engagement includes enquiry support as standard: if HMRC opens a compliance check into a claim we prepared, we handle the response as part of the engagement. If a case escalates to formal review, alternative dispute resolution or the tribunal, we scope and agree that work with you separately, so the cost of any further work is agreed before it starts, not discovered after it. We also take over enquiries on claims that other advisers prepared.

How likely is an HMRC enquiry?

Far more likely than it used to be. Roughly one in six claims is checked, and that scrutiny is the deliberate result of a compliance campaign that HMRC’s own figures show working: HMRC’s estimate of error and fraud in the R&D reliefs fell from 17.6% in 2021-22 to 5.9% in 2024-25. Over the same period the claimant population changed shape. HMRC’s statistics show claim numbers fell 26% to 46,950 in 2023-24, while the average claim value rose by about a third and total relief held steady at about £7.6bn.

Read those numbers together and the message is plain. Casual claims are leaving the system, the claims that remain are larger and more closely examined, and the checking rate is not a temporary blitz. A claim should now be prepared on the assumption that a compliance officer will read it.

What does an R&D enquiry look like, step by step?

Five stages, in practice:

  1. The opening letter. A compliance check notice, usually with a first list of questions and a deadline for response. Nothing about it is informal, and the early answers frame the whole enquiry.
  2. Information and documents. HMRC asks for project evidence, cost workings and contracts. Requests can be broad; part of a good defence is agreeing a sensible scope.
  3. Testing the technical case. Written questions probing the claimed advance and uncertainties, sometimes followed by a call or meeting with your competent professionals.
  4. HMRC’s view. Acceptance, a proposed adjustment, or rejection of the claim, with reasons.
  5. Resolution. Agreement, or escalation: a statutory review by an officer not previously involved, and beyond that an appeal to the First-tier Tribunal.

How long does an R&D enquiry take?

Months rather than weeks, and you should plan on that basis. There is no fixed timetable. Correspondence moves in rounds, often 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 when the claim survives intact.

The honest conclusion from that: nothing shortens an enquiry as reliably as a claim that was prepared properly in the first place.

What does HMRC ask for?

The questions track the statutory definition and the cost rules:

  • What advance in a field of science or technology was sought, and why it is an advance for the field rather than only for your company. This is the heart of what counts as qualifying R&D.
  • What the scientific or technological uncertainties were, and why a competent professional in the field could not readily resolve them.
  • Who your competent professionals are, and how they reached their view.
  • How the costs were built up: staffing apportionments, subcontractor contracts, consumables, and the treatment of externally provided workers.
  • Whether the procedure was followed: the claim notification where required, and the Additional Information Form with every claim.

How do enquiries end?

Three ways. The claim is accepted in full; it is adjusted, with part of the relief disallowed; or it is rejected. Where relief has already been paid and is then disallowed, HMRC claws it back with interest.

Penalties are a separate question, and they depend on behaviour. A company that took reasonable care faces repayment but no penalty. Careless preparation attracts penalties on top, and deliberate overclaiming attracts substantially higher ones. The quality and timing of disclosure also matters: coming forward early and cooperating fully reduces the amount. This is one reason to take advice the day the letter arrives rather than after positions have hardened.

Why do R&D claims fail under enquiry?

The same defects recur:

  • The claimed advance is framed at company level (“new to us”) rather than field level, which fails the statutory definition.
  • Project boundaries take in whole development programmes, so routine work contaminates the qualifying core.
  • No competent professional stands behind the technical narrative, or the named contact cannot answer technical questions.
  • Costs do not reconcile to the accounts, or apportionments have no evidential basis.
  • The procedure failed: a missed notification window or a missing AIF invalidates a claim regardless of technical merit.

None of these is bad luck. Each one is a preparation failure, which is also why each one is avoidable.

How does defensible preparation differ?

It starts from the definition rather than the spend. Projects are selected because they meet the statutory test; competent professionals are interviewed and their reasoning recorded; the uncertainty is documented as it was experienced, failed approaches included; costs are reconciled to the accounts; and the AIF is written to answer HMRC’s questions before they are asked. The result is a claim we are content to defend, which is the only standard worth preparing to. We say defensible rather than guaranteed, because no honest adviser can promise you an outcome with HMRC.

For SMEs that want certainty earlier in the process, two optional HMRC routes exist. First-time claimants can apply for HMRC’s long-standing advance assurance, which covers the whole of a first claim and, where agreed, the company’s first three accounting periods. Since spring 2026 a voluntary Targeted Advance Assurance pilot, announced at the Autumn Budget in November 2025, has run alongside it, giving HMRC’s view on up to two named areas of a claim (proposals for mandatory clearances were rejected). We can help you weigh whether either fits your circumstances. HMRC has also offered a non-binding online R&D qualification checker since September 2025: useful as a first sense-check, but it binds no one, and it is not a substitute for a competent professional’s assessment.

What if the claim under enquiry was prepared by someone else?

We take those on: defending enquiries into claims filed by other advisers is an explicit part of our service, and it matters because some of the firms that filed aggressive claims are no longer around to answer for them.

The work starts with an honest assessment of the claim as filed: which parts are defensible, which are weak, and which should be conceded. Where a claim is wrong, correcting it early is usually the cheapest available path, because disclosure reduces penalties. As a firm regulated by ICAEW and bound by Professional Conduct in Relation to Taxation, we will tell you the truth about a weak claim rather than charge you to defend the indefensible.

What about old-scheme enquiries?

For accounting periods that began before 1 April 2024, under the old SME and RDEC schemes, two First-tier Tribunal decisions shape enquiry defence: Collins Construction and Stage One Creative Services. The tribunals held that commercial contract payments are not subsidies, and that contracted-out R&D under the old SME scheme has no single definitive test. HMRC declined to appeal either decision and updated its guidance manual in February and March 2025.

If you are facing an old-scheme enquiry on subsidised or subcontracted expenditure grounds, those decisions matter to your position. They sit alongside the amendment windows covered in backdated R&D claims, and if you are unsure which regime your period falls under, start with which R&D scheme applies to your company.

If the letter has arrived, act now

An enquiry is winnable, and the opening weeks matter disproportionately: the first response sets the scope, the tone and often the outcome. If you have received a compliance check letter about an R&D claim, whoever prepared it, get in touch and we will give you a straight assessment of where you stand.

If you are preparing a claim and want it built to withstand this environment from the start, begin with our R&D tax relief guide. And if no enquiry has arrived but you would like to know how your existing claims would hold up, our free claim review is a confidential second opinion before HMRC ever asks. Either way, enquiry support at LimestoneGrey is included as standard: we handle the response to a compliance check as part of the engagement, and if a case escalates to review, ADR or the tribunal, we agree that further work with you transparently before it begins.

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

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