HMRC launches new R&D voluntary disclosure platform amid increased enforcement and compliance efforts

HMRC has introduced a new specialist research and development (R&D) voluntary disclosure platform.

This development follows a surge in HMRC R&D compliance activity, including a number of high-profile raids and arrests. It is estimated that over £1 billion has been lost to the Exchequer in recent years due to speculative or fraudulent R&D claims, prompting HMRC to take decisive action.

How does the platform work?

The new platform allows companies or their agents to disclose innocent or careless inaccuracies in R&D tax relief claims that are now out of time for amendment in tax returns. The disclosure is made by submitting an online form and supporting computations. Deliberate inaccuracies, where companies knowingly submitted false claims, must be disclosed through the Contract Disclosure Facility (CDF) procedure and not the platform. Once full disclosure has been made, HMRC will typically resolve the matter through a contract settlement, requiring repayment of the tax owed alongside interest and penalties.

Who can use it?

The platform is available to businesses that satisfy the following criteria:

• They claimed too much R&D tax relief.
• The time limit to amend the Company Tax Return has expired.
• They need to repay Corporation Tax or tax credits overpaid due to the incorrect claim.

This service can be used by business representatives (such as directors or company secretaries) or tax advisers acting on behalf of their clients.

What are the benefits?

By acting early and unprompted, businesses can significantly reduce potential penalties for careless errors, which can otherwise be up to 30% of the tax owed. In some cases, penalties may be completely waived for those who cooperate fully and help HMRC resolve the issue efficiently.

How quickly will HMRC respond?

HMRC will issue a payment reference within 15 days of the disclosure being made and respond within 30 days, either accepting the disclosure, requesting more information, or rejecting it. Companies must pay any tax due within 30 days or if they are unable to pay in full, they can request a time-to-pay arrangement, with terms depending on their personal circumstances. If the disclosure is rejected, they may need to provide more information to HMRC.

Top Tips and Things to Consider

• Act quickly: Use the voluntary disclosure platform as soon as possible to mitigate potential penalties and interest.  Unlike other HMRC disclosure facilities, you cannot notify HMRC of the intent to make a disclosure before submitting the detailed disclosure. 
  
  
• Verify your claims: Ensure that everything that is incorrect with your past R&D claim is disclosed. An incorrect disclosure could lead to further scrutiny from HMRC.
  
  
• Seek professional guidance: Engage tax specialists with the necessary expertise to assist with calculations and ensure compliance with all of HMRC’s requirements.
  
  
• Pursue redress: If you suspect you were mis-sold services or given negligent advice, seek expert legal advice immediately, as time limits are likely to apply.
  
  
• Stay informed: Monitor HMRC’s enforcement actions and evolving guidelines to reduce risk and maintain compliance.

How we can help

We are a market leading tax dispute resolution team with significant experience of successfully managing HMRC R&D compliance checks. Please contact Adam Craggs or Michelle Sloane if you have any queries or wish to discuss anything further.