The eagle eyed amongst you may have seen a recent tax case* involving R&D credits that went in HMRC’s favour. Essentially the case reconfirms that the burden of proof sits with the taxpayer to prove that it is undertaking qualifying R&D activities.
It seems likely that this case will give renewed vigour to HMRC, fuelling its quest to stamp out the recent trend of flawed SME claims.
Genuine claimants should continue to ensure that appropriate records and documentation are retained to support claims, on a timely basis. For these companies, I would say there is no cause for concern as nothing has really changed.
Comparably, for those worried about the quality of their claims, now is the time to do something about it. You have been warned.
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*In Grazer Learning Limited v R & C Commrs [2021] TC08282, the FTT found the taxpayer could not establish that its R&D expenditure was incurred in resolving a technological uncertainty and achieving an advance in science and technology.
