TBAT Innovation Compliance Check Summary

Like many R&D tax credit professionals and accountants, we have conducted a number of compliance checks, supporting both our own claims and those of clients who sought assistance with claims prepared by others. The claims we’ve encountered during compliance checks have varied significantly in terms of professional standards and understanding of the schemes. Rather than discussing specific numbers, I will focus on percentages to illustrate how TBAT Innovation is managing these compliance checks.

The following table is a summary of where all our compliance checks are at, with a further analysis of resolved later.

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TBAT are working through the outstanding compliance checks, but with response times from HMRC sometimes stretching into months, progress is slow. Our goal is to move to Alternative Dispute Resolution (ADR) as quickly as possible during the Q&A stage, whether that is direct ADR application or applying for tribunal to access ADR. At ADR we are seeing a quicker process to resolve the compliance checks than exchanging letters through the Q&A stage.

Additionally, we are observing a decrease in rates of enquires being opened with our own clients, having opened only one new inquiry in the past six months. I like to think that we have established a strong reputation for effective R&D claims with HMRC, or perhaps it’s due to the robust R&D reports we produce with the help of our technical experts. I wish I knew the exact reason! Regardless, we will continue to support our clients as thoroughly as possible and incorporate lessons learned into all our prepared claims.

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Of the resolved claims we are pleased that 64% are fully accepted by HMRC for their R&D and the claim value. This is a testament to the whole R&D tax credit team making sure that our R&D project assessments are really robust.

A few claims were withdrawn by clients due to their low value, as they deemed it not worth the effort to pursue, although we would have supported those R&D claims in all instances.

The 25% of claims that received partial acceptance resulted from various issues, including client-prepared claims with errors, a situation where the client failed to inform us about furlough, despite us asking, and some cases where HMRC remained firm in their position, even though we disagreed.

It’s encouraging to note that TBAT Innovation has not experienced any full rejections of claims from HMRC, which is excellent news for both us and our clients!

So, of the resolved compliance checks only 36% resulted in adjustments due to compliance checks. In contrast, HMRC has reported that 70-80% of all compliance checks lead to changes in claims, which may include rejections, withdrawals, or partial acceptances. This represents a significantly better-than-average outcome for TBAT Innovation and the clients we support.

If you would like to learn more about how TBAT Innovation can assist with your R&D claim, please contact Ian Davie at Iand@tbat.co.uk call 07500 989 355, or book an appointment to discuss further.