Three different things get called a rejected claim, and the way out depends on which. A claim can be rejected on procedure — the Additional Information Form filed after the return, accounting period dates that do not match, no claim notification where one was needed — and HMRC then writes to confirm it is removing the R&D claim from the return. A claim can be cut back or refused at the end of a compliance check, which ends in a closure notice whose amendments you have 30 days to appeal in writing. Or nothing has been decided and the enquiry is still running. Only the second carries a right of appeal, so establish which you are in, and check on what basis HMRC says it has removed the claim, before replying to anything.
Procedural rejection is not a decision about your R&D
It is a door closing on the paperwork, and HMRC’s guidance names the two commonest versions. Where the Company Tax Return is submitted before the Additional Information Form, the claim is rejected: HMRC writes to confirm it is removing the R&D claim from the return, and where that lands close to the last date for amending the return, there may be no time left to make a valid claim at all. Where the accounting period dates on the form do not match the return, the form is rejected and the claim removed the same way. The claim notification requirement has no late route at all: a company that had to notify and did not has no claim for the period. None of that is a view on your projects. The only live question is whether a window is still open.
What a closure notice says, and what to do about it
An enquiry ends when an officer issues a closure notice stating the officer’s conclusions and either recording that no amendment is needed or making the amendments required to give effect to them. Cutting a claim back and refusing it outright are the same procedure at different sizes: the officer amends the return, and the amendment is the dispute.
The appeal lies against the amendment: notice in writing, within 30 days after the amendment was notified to the company, to the officer who issued the closure notice. Corporation tax is a direct tax, so the appeal goes to HMRC first — you cannot start at the tribunal.
One rescue route in the legislation is easy to miss. Where the relief removed was claimed under Chapter 2 of Part 13 of the Corporation Tax Act 2009 — Enhanced R&D Intensive Support — and the company was not entitled to it, it may still claim R&D expenditure credit on the eligible expenditure, up to whichever is later: 30 days after notice of the amendment is issued, or, if an appeal is brought against it, 30 days after that appeal is finally determined. A company that concedes it was never intensive enough is not left with nothing.
Review, tribunal and mediation
HMRC will offer a review, or you can ask for one. A review officer in a different team, who was not involved in the original decision, carries it out, and it usually takes 45 days — running from the day HMRC received your acceptance where HMRC offered the review, or from the day HMRC told you its view where you asked for one. If HMRC gives no notice of its conclusions in that period, the review is treated as having concluded that HMRC’s view is upheld.
If the review goes against you, there are 30 days from the date of the review conclusion letter to notify the appeal to the First-tier Tribunal. Alternative dispute resolution runs alongside, during a compliance check where progress has stalled or at the end of one where a decision can be appealed: an HMRC mediator works with you and the case officer without taking over responsibility for the dispute.
Correcting and refiling, where a window is still open
An R&D claim can be made, amended or withdrawn up to the last day of the period of two years beginning with the last day of the period of account, where that period is not longer than 18 months. Inside that window, a claim rejected on procedure can usually just be made again properly, with its own Additional Information Form filed before or on the same day as the amended return. Outside it, an officer may allow a late claim, but that discretion is exercised only in accordance with Statement of Practice 5 (2001). Backdated R&D claims works through the windows period by period.
What an amendment cannot do is end an enquiry: made while an enquiry is in progress, it neither restricts the scope of the enquiry nor takes effect while the enquiry continues; it is taken into account in the enquiry, and takes effect as part of the amendments made by the closure notice. Correcting a claim under enquiry is still worth doing — it is how a careless error becomes a disclosed one — but it is a step inside the enquiry, not a way out.
When to get a second opinion
Two moments justify one. The first is the week the closure notice or removal letter arrives, when what matters is what HMRC has decided, what is still open and which deadline is nearest. The second is quieter: a claim has been filed and you are no longer confident in it. Our free claim review is a confidential read on a filed claim, including one prepared by another adviser.
We take on enquiries into claims other firms prepared, and we say what we find: some should be defended, and some conceded and disclosed, because what HMRC can recover, and any penalty on top, turns on behaviour. What an HMRC R&D enquiry involves sets out the process from the opening letter onwards. No adviser can promise you an outcome with HMRC.
Sources
- Additional information you must submit before you claim R&D tax relief — the form must be submitted before or on the same day as the CT600, and first where both go the same day; where the return goes first the claim is rejected and HMRC writes to confirm it is removing the R&D claim from the return, and close to the last date for amending the return a valid claim for the period may no longer be possible; where the accounting period dates do not match, the form is rejected and the claim removed.
- FA 1998 Sch 18 para 32 — an enquiry is completed by a partial or final closure notice, which takes effect when it is issued.
- FA 1998 Sch 18 para 34 — the closure notice must state the officer’s conclusions and make any amendments required to give effect to them; an appeal may be brought against that amendment, by notice in writing, within 30 days after the amendment was notified, to the officer who gave the notice.
- FA 1998 Sch 18 para 83E — a claim may be made, amended or withdrawn up to the last day of the period of two years beginning with the last day of the period of account where that period is not longer than 18 months; where an officer removes a claim for relief under Chapter 2 of Part 13 CTA 2009 to which the company was not entitled, an R&D expenditure credit claim on the eligible expenditure may be made up to whichever is later of 30 days after notice of the amendment is issued, or 30 days after an appeal against it is finally determined; and a claim may be made outside the period if an officer allows it.
- CIRD81800: time limits for claims — the two-year limit, and HMRC’s discretion to accept late claims exercised only in accordance with Statement of Practice 5 (2001).
- FA 1998 Sch 18 para 31 — an amendment made while an enquiry is in progress does not restrict the scope of the enquiry and does not take effect while the enquiry continues.
- Disagree with a tax decision or penalty: appeal against a tax decision — 30 days from the date of the decision letter to appeal or accept a review.
- Disagree with a tax decision or penalty: get a review — the review officer is in a different team and was not involved in the original decision; reviews usually take 45 days; 30 days from the date on the review result letter to appeal to the tax tribunal.
- TMA 1970 s49E and s49G — the 45-day review period beginning with the relevant day or such other period as agreed, the review treated as upholding HMRC’s view where no notice is given in time, and the 30-day post-review period for notifying the appeal to the tribunal.
- Appeal to the tax tribunal — direct tax decisions must be appealed to HMRC before the First-tier Tribunal.
- Alternative dispute resolution — an HMRC mediator who will not take over responsibility for the dispute; available during a compliance check where progress has stalled, and at the end of one where a decision has been made that you can appeal against.
- Tell HMRC that you’re planning to claim R&D tax relief — the claim notification period and who must submit one.
- CTA 2009 Part 13 Chapter 2 — headed “Relief for loss-making, R&D-intensive SMEs” for accounting periods beginning on or after 1 April 2024.
This page describes the rules as they stood at the review date above, as general information rather than advice on your circumstances. For how that distinction works, see our terms; for an answer on your own facts, talk to us.