Hundreds of #SMEs have suffered R&D claim enquiries conducted poorly by #HMRC’s Individual and Small Business Compliance (‘ISBC’) team.
Bright R&D Limited took on the fight for one company when the value didn’t justify charging fees because it was the right thing to do. The claim related to research and development in health supplements.
HMRC’s view of the matter letter of 15 December 23 confirmed that, based on the “clear explanations” provided on 10 November 2022 the project qualified. Good news that our understanding and interpretation of the DSIT Guidelines is on point! Bad news that it took a further 6 rounds of extensive correspondence, complaints to a senior team leader and 13 months for HMRC to finally accept the claim.
I have utmost respect for many R&D Inspectors and the senior team within HMRC and will often sing their praises. Sadly, HMRC’s conduct on this case was unprofessional, technically inaccurate and aggressive in issuing pre-decision letters before information had been collected, applying penalty charges (now overturned) and belittling the company’s R&D.
The company’s Director and Owner said:
“When HMRC enquired into our R&D claim we had no concerns as we were confident that we were doing qualifying R&D. Unfortunately that all changed following a couple of letters from HMRC telling us our projects didn’t qualify as what we’d done was obvious and easy! (We wish!)
We would have conceded at that point as it felt pretty uncomfortable and not worth the time and effort it was taking up to challenge their decision.
Angela explained to us how HMRC’s approach was technically wrong and intentionally aggressive to push us into giving up. Her technical knowledge, strategic approach and determination to get to the right outcome made all the difference – after over a year HMRC finally did a U-turn on both the claim and penalties charged!
We couldn’t ask for a better result or service.”
Whilst this was a good outcome in the end, serious change is required urgently before UK R&D starts to stagnate. Surely it is time for the more experienced, senior R&D folk to intervene to help the ISBC team with guidance, training and to apply some common sense?
And if you are similarly battling an ISBC enquiry, don’t be bullied into conceding if your claim is genuine and valid.
Get in touch if you have any questions, we are always happy to help.
