Paul Rosser asks: are HMRC reducing the rate of fraudulent R&D claims?
HMRC has estimated that the rate of error and fraud within the R&D tax relief schemes has roughly halved due to the impact of recent compliance interventions, but are these interventions enough, and why weren\u2019t they introduced earlier?
As I mentioned in my previous article which gave a brief history of R&D advisor scams (HMRC EIP, June\/July 2024), R&D claims have always been prone to error and fraud due to claims being processed on a self-assessment basis, with little checking being undertaken by HMRC as to the accuracy of the claims.
Errors were missed which led to them being repeated and after a while it became clear that the schemes could easily be taken advantage of which, over the years, has turned into a pretty lucrative business model for many R&D advisors.
No one knows exactly when this trend started but it is likely rooted in the actions of a decade ago when HMRC began a range of cost saving measures, including shutting down the seven specialist R&D units, reducing their head count and adopting \u201can operational policy that R&D claims below a certain size would not be subject to any careful scrutiny.\u201d<\/p>\n\n\n\n
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