New disclosure facility for R&D claims launches
A new disclosure facility for companies to rectify inaccurate, historic R&D claims, has been launched. Who might be affected, and how should you use it if you need to?
Due to the frequency of errors and fraudulent activity in Research & Development (R&D), HMRC has published guidance alongside a new disclosure facility for overclaimed tax relief. Generally, HMRC can charge higher penalties if it discovers an inaccurate claim, compared to the taxpayer coming forward and offering to correct their error. This facility should only be used where it is no longer possible to amend the relevant tax return to correct the tax position, i.e. where the deadline to do so has lapsed and there is tax to repay.
One potential issue is of course that taxpayers may be unaware that relief has been overclaimed, having relied on advice taken at the time the claim was made – which may have been done on a “process now check later” basis. Many R&D claim agents have been found to be untrustworthy as they targeted sectors that HMRC have noted are unlikely to be carrying out R&D, such as care homes, retailers, childcare providers, pubs and restaurants. Businesses operating in such sectors should review historic R&D claims and seek advice from a reputable firm if there is any doubt as to the validity of the claims.
To complete the disclosure, calculations should be submitted with the online form. Within 30 days HMRC should respond to either accept or reject the revised calculations, or to request further information.
Related Topics
-
HMRC reminds employers about payrolling benefits deadlines
HMRC is reminding employers of key dates and preparations ahead of the transition to real-time payrolling of benefits in kind (BiKs). With an important voluntary registration deadline approaching, what do payroll teams need to know?
-
Why do frozen mileage rates affect VAT?
Your business pays a fixed mileage allowance to staff who use their private cars for business travel. The rates published by HMRC have been frozen since 2011 but is this relevant to determine how much input tax you can claim on the payments?
-
HMRC restarts direct recovery of tax debts from bank accounts
HMRC has resumed use of its Direct Recovery of Debts (DRD) powers, enabling it to recover unpaid tax directly from the bank accounts of businesses and individuals who have ignored repeated attempts to settle outstanding liabilities. What does this mean in practice for business owners and directors?