A chemicals company approached me late last year with a troublesome R&D enquiry. HMRC didn’t understand how the projects made an overall advance in technology. Based on what I read, I could understand why, so approached with caution. My view changed dramatically however following a call with the company and their technical team.
We put together a simple scope of work involving me speaking with the R&D Inspector, agreeing that we would respond on 2 out of 8 projects and immediately conceded a software project that frankly didn’t meet the BEIS Guidelines.
A month later, the company was thrilled to hear that HMRC not only accepted that the 2 projects qualified, but as we had substantiated c.70% of qualifying costs, didn’t need anything further for the remaining 5 projects. The enquiry was concluded with no penalties charged.
This experience was a credit to HMRC and the Inspector involved for keeping an open mind, digesting and understanding the information provided and applying some pragmatism to conclude things efficiently.
If only all R&D enquiries could be dealt with in a similar way – the Individual and Small Business Compliance Team could learn a lot.
