Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

HMRC targets specialist agents in crackdown on R&D tax credit fraud

by November 18, 2024
November 18, 2024
HMRC targets specialist agents in crackdown on R&D tax credit fraud

Claims for multibillion-pound business tax incentives are more likely to be non-compliant when submitted with the assistance of specialist agents, according to an official review by HM Revenue & Customs (HMRC).

An inquiry into research and development (R&D) tax credits—schemes intended to encourage innovation but undermined by fraud and error—found that behaviour among some agents was “clearly not acceptable”.

In its review of incentives for business innovation, HMRC estimated that fraud and error in these taxpayer-funded schemes amounted to £4.1 billion between 2020 and April this year. The tax reliefs, designed to support companies working on science and technology projects, cost the UK about £8 billion annually.

A 2022 investigation by The Times revealed how advisers were encouraging companies to make dubious claims, many of which went unchecked by HMRC. Examples included claims for creating a vegan menu in a pub.

In response, HMRC has increased scrutiny on claims and implemented several reforms to the scheme’s rules. A document published alongside last month’s budget stated that data from a “mandatory random inquiry programme” found that almost one in three claims in its sample were “fully disallowed” because “no qualifying R&D took place”.

Overall, HMRC estimated that in 2021-22, over one in four claims under the scheme for small and medium-sized enterprises were due to fraud and error. By the most recent financial year, this figure had improved to about one in seven.

While agents are expected to help companies file accurate claims, HMRC’s inquiries revealed that “non-compliance was slightly higher in those claims that were submitted with the support of a specialist R&D agent”.

HMRC acknowledges the “vital role” agents play but noted that some “provide poor or incorrect advice to customers about what they are entitled to claim. This can lead to spurious R&D tax relief claims being submitted by customers themselves or by agents on their behalf, thereby increasing non-compliance”.

The review identified several sectors where “R&D is unlikely” but which were being “approached by unscrupulous agents”. These include care homes, childcare providers, personal trainers, wholesalers, retailers, pubs, and restaurants. Error was said to be a bigger problem than fraud.

To address this, HMRC has been running education campaigns, writing to thousands of companies to explain the qualifying criteria for R&D tax credits.

Companies in sectors traditionally associated with R&D investment have reported difficulties obtaining incentives since HMRC’s crackdown. Research by RSM UK, the accountancy and audit firm, found that more than a third of technology businesses had submitted an R&D claim that was initially approved but later challenged by HMRC, resulting in companies needing to make repayments.

David Blacher, partner at RSM UK, commented: “The increased focus on weeding out erroneous claims has been detrimental to those genuinely in need of funding.”

Read more:
HMRC targets specialist agents in crackdown on R&D tax credit fraud

0
FacebookTwitterGoogle +Pinterest
previous post
Pentagon bracing for sweeping changes after Trump nominates Pete Hegseth for secretary
next post
Goodstack raises £22m as corporate giving platform targets £2.4bn in employee donations

You may also like

CBI calls for UK Green Transition Industrial Strategy...

July 17, 2023

Apple Faces Lawsuit by US Over Smartphone Market...

March 22, 2024

Rishi Sunak set to make history as Boris...

October 24, 2022

Budget Giveaways Likely to Be Offset by Record...

February 27, 2024

Barclays Suspends Festival Sponsorship Amid Protests

June 16, 2024

Retailers demand scrapping of ‘£2bn’ waste strategy policy...

February 24, 2023

Employee theft jumps by a fifth as cost...

February 23, 2023

How to Spot Roof Damage Before It Becomes...

May 20, 2025

Remote-working jobs disappearing from adverts

January 18, 2023

Nissan looks set to abandon Honda merger as...

February 7, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025
    • Tech ETFs are Leading Since April, but Another Group is Leading YTD

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,567)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved