Indigent Investigation Into Irregular Claims For Relief

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HMRC has decided to suspend payment of research and development (R&D) tax credits. 

HMRC has opened an investigation into irregular claims for tax credit payments. It first informed accountancy companies to make them aware of the decision to suspend the payment of R&D tax credits until the situation is clarified.

HMRC informed the companies that this decision will most likely cause delays in processing applications for research and development tax credits.

Bearing in mind that many of the R&D tax credit applications are genuine, they will most likely not even be affected.

HMRC has asked applicants to check their online account for updates on the status of applications before contacting the R&D helpline/mailbox.

HMRC will send out the usual e-mail to keep claimants up to date on processing times, keeping them updated on changes as soon as possible.

To speed up the processing of payments HMRC has urged people to check that they are correct in completing all items in the R&D section of their corporation tax return (form CT600). In addition, it should be noted that the additional information will help HMRC process requests more quickly.

Also to be taken into account is the fact that a penalty may be applied for declarations that are incorrect or fraudulent.

HMRC has announced that it has suspended Research and Development Tax Credit (RDTC) payments to investigate some irregular claims.

Many of the R&D relief claims, even if they are not directly affected, may be delayed in processing. And the guarantee to prevent abuse of the relief.

At the end of last year, Azets, the auditing firm, issued a warning to SMEs about rogue R&D consultants targeting small businesses and making inappropriate claims.

HMRC’s latest annual report found that the monetary value of fraudulent R&D claims in 2021 was £303m, up from £271m the year before.

Taking into account that the Chancellor, in the Autumn Budget 2021, announced that R&D tax credit reforms will come into effect in April 2023, HMRC will tighten controls on reliefs.

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