United Kingdom: Penalties | Research Credit Integrity Alliance

This page summarizes the penalties that apply to United Kingdom research and development (R&D) tax relief claims, first for the claimant company and then for the advisers who prepare claims. It describes the rules only and makes no recommendation.

Penalties for the claimant company

Inaccurate claims

HMRC may charge a penalty if a company sends a return or other document containing an inaccuracy that results in tax being unpaid, understated or over-claimed, and the inaccuracy was careless, deliberate, or deliberate and concealed.1 HMRC states that if it identifies an inaccuracy in an R&D claim that led to an understatement of tax or an overpayment of relief, it is legally required to consider whether an inaccuracy penalty is appropriate.2

The penalty is a percentage of the "potential lost revenue", which includes an amount arising from an incorrect claim.1 The range depends on the behavior and on whether the company told HMRC about the inaccuracy before it had reason to believe HMRC had discovered it (an unprompted disclosure) or afterwards (a prompted disclosure):1

Behavior	Unprompted disclosure	Prompted disclosure
Reasonable care taken	No penalty	No penalty
Careless	0% to 30%	15% to 30%
Deliberate	20% to 70%	35% to 70%
Deliberate and concealed	30% to 100%	50% to 100%

Within each range, HMRC reduces the penalty according to the quality of the company's disclosure: up to 30 percent for telling, up to 40 percent for helping and up to 30 percent for giving access to records.1 HMRC can suspend a penalty for a careless inaccuracy for up to two years if it can set conditions the company can meet.1

Using an adviser

HMRC's factsheet states that if a taxpayer asks someone else, such as an employee or adviser, to do something on its behalf, the taxpayer must do everything it reasonably can to prevent inaccuracies, and may be charged a penalty if it does not.1 Ways of showing reasonable care include keeping accurate records and checking with a tax adviser or with HMRC when unsure.1 HMRC also states, in its R&D publication, that a customer who uses a tax agent remains responsible for its own tax affairs.2

Officers, publication and prosecution

A company officer may have to pay some or all of a company's penalty for a deliberate inaccuracy if the penalty is due to the officer's actions and the officer gained, or tried to gain, personally, or the company is or is about to become insolvent.1 HMRC may publish the details of a person who deliberately got their tax affairs wrong, except where the maximum penalty reduction was given, and may carry out a criminal investigation where someone has deliberately done something wrong.1

Interest and recovery

Penalties are separate from the tax itself. HMRC recovers amounts claimed in error where appropriate and in line with legislation.2 Interest is usually charged on tax in dispute if an appeal is lost.3

Missing notifications and information

A failure to make a required claim notification, or to provide the required additional information, does not lead to a penalty under these rules. Instead the claim is invalid.45

Penalties and sanctions for advisers

Sanctionable conduct

Since 1 April 2026, HMRC can charge penalties on tax advisers for "sanctionable conduct", under Schedule 38 to the Finance Act 2012 as amended by section 250 of and Schedule 22 to the Finance Act 2026.67 Sanctionable conduct is where a tax adviser does something, or omits to do something, in the course of assisting clients with their tax affairs, with the intention of bringing about a loss of tax revenue.6 HMRC can continue to charge penalties for "dishonest conduct" by tax agents for conduct before 1 April 2026.8

A tax adviser for this purpose is an organization or individual who, in the course of a business, assists other persons with their tax affairs, including by providing assistance with any document HMRC is likely to rely on to determine a person's tax position.9

The process and penalties are:6

Stage	What HMRC can do
Suspicion	Where HMRC has reasonable grounds to suspect sanctionable conduct, issue a file access notice to obtain relevant documents
Determination	Issue a conduct notice determining that the adviser has engaged in sanctionable conduct
First penalty	Up to 70% of the potential lost revenue, capped at £1 million
Second to fifth penalty	Up to 85% of the potential lost revenue, capped at £5 million
Sixth or later penalty	Up to 100% of the potential lost revenue, with no maximum amount
Minimum	£7,500, which also applies where there is no potential lost revenue or it cannot be determined
Publication	HMRC must publish details of the adviser if it issues a penalty of more than £7,500

The penalty is reduced if the adviser makes a disclosure.6 A person can also be charged penalties for failing to comply with a file access notice, and can be prosecuted for concealing or destroying documents requested in one.6

During the passage of the legislation, a minister said the previous maximum penalty of £50,000 was "a poor deterrent", that the powers will apply only to advisers who act with the intention of bringing about a loss of tax revenue, and that they will not affect advisers who act in good faith or who make mistakes while trying to do the right thing.7

Registration sanctions

Under the mandatory tax adviser registration rules, an adviser that interacts with HMRC for clients while subject to a compliance notice faces a financial penalty of £5,000 for each prohibited interaction, rising to £10,000 if it has had four or more such penalties in the previous two years or is subject to an ineligibility order.10 Registration can also be suspended, and HMRC can make ineligibility orders and publish details of sanctioned advisers where the legislation permits.11 See Adviser registration.

Other powers

HMRC's standard for agents lists other options for dealing with agents who do not meet the standard, including blocking access to HMRC's agent services, refusing to deal with an agent and criminal investigation where an offense is suspected. HMRC may also inform professional bodies of misconduct by their members.12 HMRC states that its R&D Anti-Abuse Unit carries out compliance activity where abuse of the relief is suspected at customer or agent level.2

Summary of who bears what

Consequence	Claimant company	Adviser
Repay relief claimed in error	Yes2	Not under these rules
Inaccuracy penalty	Yes, unless reasonable care was taken1	Not under the claimant's inaccuracy penalty
Sanctionable conduct penalty	No	Yes, where conduct is intended to bring about a loss of tax revenue6
Registration penalties	No	Yes, for prohibited interactions10

Sources

HM Revenue and Customs, Penalties for inaccuracies in returns and documents: CC/FS7a (updated 21 July 2026), sections "When we may charge you a penalty for an inaccuracy", "When we won't charge you a penalty for an inaccuracy", "How we work out the amount of a penalty", "How we can suspend a penalty", "When a company officer may have to pay some or all of a company's penalty for a deliberate inaccuracy" and "If you've deliberately done something wrong". https://www.gov.uk/government/publications/compliance-checks-penalties-for-inaccuracies-in-returns-or-documents-ccfs7a/compliance-checks-for-penalties-of-inaccuracies-in-returns-or-documents-ccfs7a-factsheet (accessed 11 October 2026). Back
HM Revenue and Customs, Approach to Research and Development tax reliefs 2023 to 2024 (published 30 October 2024), sections 2.4 and 2.5. https://www.gov.uk/government/publications/hmrcs-approach-to-research-and-development-tax-reliefs-2023-to-2024/approach-to-research-and-development-tax-reliefs-2023-to-2024 (accessed 11 October 2026). Back
GOV.UK, Appeal to the tax tribunal, section "Overview", "Delay your payment while you appeal". https://www.gov.uk/tax-tribunal/print (accessed 11 October 2026). Back
HM Revenue and Customs, Tell HMRC you want to claim Research and Development (R&D) tax relief (last updated 31 October 2024), section "When to submit the form". https://www.gov.uk/guidance/tell-hmrc-that-youre-planning-to-claim-research-and-development-rd-tax-relief (accessed 11 October 2026). Back
HM Revenue and Customs, Corporate Intangibles Research and Development Manual, CIRD182000, "R&D Tax Reliefs: reformed reliefs: claims process: additional information form" (updated 25 August 2026), section "Statutory framework". https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird182000 (accessed 11 October 2026). Back
HM Revenue and Customs, Compliance Handbook, CH176100, "Sanctionable conduct by tax advisers: Overview" (manual updated 7 October 2026). https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch176100 (accessed 11 October 2026). Back
HM Revenue and Customs, Compliance Handbook, CH176150, "Sanctionable conduct by tax advisers: Legislation" (manual updated 7 October 2026). https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch176150 (accessed 11 October 2026). Back
HM Revenue and Customs, Compliance Handbook, CH176140, "Sanctionable conduct by tax advisers: Commencement date" (manual updated 7 October 2026). https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch176140 (accessed 11 October 2026). Back
HM Revenue and Customs, Compliance Handbook, CH176160, "Sanctionable conduct by tax advisers: who is a tax adviser" (manual updated 7 October 2026). https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch176160 (accessed 11 October 2026). Back
HM Revenue and Customs, Mandatory Tax Adviser Registration manual, MTAR30400, "Sanctions and safeguards: financial penalties for prohibited interactions" (manual updated 8 October 2026). https://www.gov.uk/hmrc-internal-manuals/mandatory-tax-adviser-registration/mtar30400 (accessed 11 October 2026). Back
HM Revenue and Customs, Mandatory Tax Adviser Registration manual, MTAR30100, "Sanctions and safeguards: overview of HMRC's approach to sanctions" (manual updated 8 October 2026). https://www.gov.uk/hmrc-internal-manuals/mandatory-tax-adviser-registration/mtar30100 (accessed 11 October 2026). Back
HM Revenue and Customs, The HMRC standard for agents (updated 9 February 2026), section 3.2. https://www.gov.uk/government/publications/hmrc-the-standard-for-agents/the-hmrc-standard-for-agents (accessed 11 October 2026). Back