Types of HMRC R&D Enquiries
Understanding what type of enquiry you're facing is the first step to responding effectively. Each type has different characteristics and requires a tailored approach.
Pre-Payment Compliance Checks
Since April 2022, HMRC has significantly increased pre-payment scrutiny of R&D claims. These checks occur before your claim payment is released.
Characteristics
- Most common type of enquiry
- Triggered before payment is made
- Can delay payment by 3-6 months
- Usually focused on specific aspects of the claim
Common Triggers
- First-time R&D claimants
- Claims above certain value thresholds
- Claims from sectors with higher error rates
- Missing or incomplete Additional Information Form
- Agent compliance history
Our Experience
Pre-payment checks are often resolved by providing clearer technical explanations and supporting evidence. Professional representation significantly speeds up resolution.
Good news: Pre-payment checks, while frustrating, are often the easiest to resolve with proper documentation and clear communication.
Aspect Enquiries
An aspect enquiry focuses on specific elements of your R&D claim rather than reviewing everything.
Characteristics
- Targeted questions about particular projects or costs
- Usually received after payment (enquiry into filed return)
- Often manageable if original claim was properly prepared
- Typically 30-day response deadline
Common Focus Areas
- Technical eligibility of specific projects
- Time allocation methodology
- Subcontractor arrangements
- Competent professional qualifications
- Consumables calculations
Example Questions HMRC Might Ask
- "Please explain how Project X sought to achieve an advance in science or technology"
- "What technological uncertainty existed at the start of the project?"
- "How was the 60% time allocation for [Employee] determined?"
Full Enquiries
A full enquiry involves a comprehensive review of your entire R&D claim and supporting documentation.
Characteristics
- More resource-intensive for both parties
- May involve face-to-face or video meetings
- Can take 6-18 months to resolve
- May expand to examine other tax matters
What HMRC Examines
- All projects claimed
- Complete cost calculations
- Staff qualifications and roles
- Subcontractor arrangements
- Grant funding interactions
- Previous years' claims (potentially)
Important: If HMRC identifies issues in a full enquiry, they may open "discovery assessments" for previous accounting periods. This makes professional representation particularly important.
HMRC Units Handling R&D Enquiries
Different HMRC units handle R&D enquiries depending on the size and nature of your business.
| Unit | Full Name | Focus | Typical Cases |
|---|---|---|---|
| ISBC | Individual & Small Business Compliance | SMEs, smaller claims | Random selection, risk indicators, first-time claims |
| WMBC | Wealthy & Mid-sized Business Compliance | Larger companies | Complex claims, higher values, sector specialists |
| FIS | Fraud Investigation Service | Suspected fraud/abuse | Unusual patterns, tip-offs, systematic abuse |
FIS Investigation
FIS (Fraud Investigation Service) enquiries are rare but serious. They typically involve suspected deliberate wrongdoing.
FIS involvement typically indicates
- Suspected deliberate overclaiming
- Fabricated R&D activities
- Fictitious employees or subcontractors
- Systematic abuse by agents
If you receive correspondence from FIS: Seek specialist legal advice immediately. Innovation Plus can recommend appropriate specialists if needed.
Not Sure What Type of Enquiry You Have?
Forward your HMRC letter to us and we'll review it within 24 hours to advise on the best approach.