United Kingdom: Reviews and audits | Research Credit Integrity Alliance

This page explains how HMRC selects and reviews United Kingdom research and development (R&D) tax relief claims. HMRC calls its reviews "compliance checks" or "enquiries". The page describes HMRC's published approach and figures only and makes no recommendation.

Risk assessment of every claim

HMRC states that every R&D claim goes through a risk assessment process when it is received, and that the additional information requirements allow it to target this process better.1 HMRC's manual says the additional information form forms part of its risk assessment of each return, and that incomplete or improper responses will be identified and increase the likelihood of an enquiry or other compliance activity.2

The manual also notes that where a valid claim is later amended, no new form is required, but submitting one to support a material change, such as adding or removing a project, may reduce the risk of a compliance intervention.2

HMRC says it aims to identify the need for a check early and, where possible, before any payment is made, but that depending on the risk it also opens some checks after payment.1

Kinds of intervention

HMRC describes a tailored approach:1

Situation	HMRC response
More information is needed to establish the facts	A compliance check asking for information or records to establish whether the project meets the definition of R&D
Similar mistakes made by large numbers of claimants	High-volume targeted activity, contacting customers and prompting them to correct errors
High value or technically complex non-compliance	More detailed examination by specialist staff
Suspected abuse of the relief, by a claimant or an agent	Compliance activity by the R&D Anti-Abuse Unit
Suspected criminality	Work by HMRC's Fraud Investigation Service

For large business customers, HMRC states that all claims are reviewed, with appropriate claims selected for a check after risk assessment, and that customers are encouraged to disclose material uncertainties to their Customer Compliance Manager before filing.1

Random enquiries

To measure error and fraud, HMRC runs a Mandatory Random Enquiry Programme (MREP), a detailed inspection of a representative sample of claims.1 The first covered claims for 2020 to 2021 and the second covered 2021 to 2022.1 The National Audit Office explains that HMRC applies the results of these random enquiries to estimate error and fraud, and that because of the time lag between expenditure, claims and completed enquiries, the claims tested date back as far as 2019 to 2020.3

Time limits

HMRC states that it generally has 12 months from the date a claim is submitted to open a check, and that most checks are opened within that limit.1 The statutory time limits are in paragraph 24 of Schedule 18 to the Finance Act 1998. For a return delivered on or before the filing date, HMRC can give notice of an enquiry up to 12 months after the day the return was delivered; for a company in a group that is not a small group, the 12 months run from the filing date instead. For a return delivered after the filing date, or where the company amends its return (for example, to make a claim), the deadline is the next 31 January, 30 April, 31 July or 31 October after the first anniversary of the day the return was delivered or the amendment was made.4 After that window, HMRC can issue a discovery assessment if it discovers an inaccuracy that an officer could not reasonably have been aware of from the information available. The time limits for a discovery assessment depend on the behavior that led to the inaccuracy.1 Under paragraph 46 of Schedule 18 to the Finance Act 1998, an assessment can normally be made up to 4 years after the end of the accounting period, up to 6 years where the loss of tax was brought about carelessly, and up to 20 years where it was brought about deliberately.5

Whether an enquiry was opened in time can itself be disputed. In one R&D case, the First-tier Tribunal decided as a preliminary issue whether HMRC's enquiry letter had been received by the last date on which HMRC could open a valid enquiry into a claim for an R&D credit made in an amended Corporation Tax return. The Upper Tribunal refused permission to appeal that decision.6

During a check

HMRC's general factsheet on compliance checks explains that HMRC may ask for information or documents, ask for a meeting, which the taxpayer can choose whether to attend, or ask to visit business premises to inspect premises, assets and records.7 If agreement cannot be reached, HMRC may use its legal powers, and a taxpayer cannot ignore an information or inspection notice.7 A taxpayer who thinks HMRC should stop the check must first tell HMRC why, and may then be able to ask the tribunal to decide whether the check should stop.7

HMRC states that when R&D checks are conducted, customers are given a contact number and email address, and that meetings may be held where appropriate.1 Where it finds that an amount was claimed in error, HMRC recovers it where appropriate and in line with legislation, and it will consider earlier years where the conditions for its discovery powers are met.1

If HMRC identifies an inaccuracy that led to an understatement of tax or an overpayment of relief, it is legally required to consider whether an inaccuracy penalty is appropriate.1 See Penalties.

When the agent stops acting

HMRC notes that in some cases agents who advised a customer or made a claim for it are unwilling to engage with a later compliance check. In that situation HMRC says the claimant should contact HMRC directly to resolve the check.1 HMRC also states that a customer who uses a tax agent remains responsible for its own tax affairs.1

HMRC figures

HMRC published the following figures, which exclude cases dealt with by its Large Business teams:1

Measure	2022 to 2023	2023 to 2024
Claims received	90,000	61,000
Claims processed within 40 days	75%	92%
Compliance checks	8,300	9,700
Coverage (checks as a share of claims)	10%	17%
Tax recovered from compliance checks	£288 million	£441 million
Average time to complete a check	269 days	246 days
Checks resulting in an adjustment	71%	77%

HMRC states that it had over 500 people working on R&D compliance, compared with around 100 in 2020 to 2021, and that 89 percent of the checks settled were resolved by agreement with the claimant.1

Results of the random enquiries

In its second random enquiry program, covering claims received in 2021 to 2022, HMRC found that 49 percent of SME claims examined were compliant, 30 percent were wholly non-compliant and 21 percent were partly non-compliant.1 HMRC reported fraud indicators in fewer than 10 percent of cases examined, accounting for around 5 percent of the total value claimed.1 HMRC also reported that around half of companies used a specialist R&D agent, and that non-compliance as a share of the value of claims was slightly higher in claims submitted with the support of a specialist R&D agent.1

Sources

HM Revenue and Customs, Approach to Research and Development tax reliefs 2023 to 2024 (published 30 October 2024), sections 1.2, 2.4 (including "Tailoring the approach", "Compliance check framework" and Table 4) and 2.5, and Annex B, Themes 1 and 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
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), sections "When and how information is submitted" and "Failure to provide complete or proper responses". https://www.gov.uk/hmrc-internal-manuals/corporate-intangibles-research-and-development-manual/cird182000 (accessed 11 October 2026). Back
National Audit Office, Report by the Comptroller and Auditor General: HM Revenue & Customs 2023-24 Accounts, Summary paragraph 11 and paragraph 2.6. https://assets.publishing.service.gov.uk/media/6889f286048fff613a4d5b72/Report_by_the_Comptroller_and_Auditor_General.pdf (accessed 11 October 2026). Back
The National Archives, Finance Act 1998 (c. 36), Schedule 18, paragraph 24, sub-paragraphs (1) to (4) and (6), legislation.gov.uk, latest available revised version. https://www.legislation.gov.uk/ukpga/1998/36/schedule/18/paragraph/24 (accessed 17 October 2026). Back
The National Archives, Finance Act 1998 (c. 36), Schedule 18, paragraph 46, sub-paragraphs (1), (2) and (2A), legislation.gov.uk, latest available revised version. https://www.legislation.gov.uk/ukpga/1998/36/schedule/18/paragraph/46 (accessed 17 October 2026). Back
Upper Tribunal (Tax and Chancery Chamber), Assembly Global Networks Ltd v The Commissioners for His Majesty's Revenue and Customs [2025] UKUT 00023 (TCC), decision of 16 December 2024, paragraphs 2 and 39. https://www.gov.uk/tax-and-chancery-tribunal-decisions/assembly-global-networks-ltd-v-the-commissioners-for-his-majestys-revenue-and-customs-2025-ukut-00023-tcc (accessed 11 October 2026). Back
HM Revenue and Customs, About compliance checks: CC/FS1a (updated 30 April 2025), sections "During the compliance check" and "If you think we should stop the compliance check". https://www.gov.uk/government/publications/general-information-about-compliance-checks-ccfs1a/about-compliance-checks-ccfs1a (accessed 11 October 2026). Back