HMRC Enquiry Support

If a letter has just arrived

A compliance check letter is unsettling, and it arrives with a deadline on it. Before anything else: you do not need to reply today, and you should not send HMRC anything you haven’t been asked for.

What we would suggest, in order:

1. Note the deadline, and nothing more, until you know what is being asked.
2. Read what HMRC has actually requested — it is usually narrower than it first appears.
3. Find the records that existed at the time the work was done, rather than writing something new.
4. Get someone technical involved before you answer. The first response sets the shape of everything that follows.

What the standard questions in the letter are really testing is set out in how to read an HMRC compliance check letter, and the whole process from opening to closure in what actually happens when HMRC opens an R&D enquiry.

Send us an overview of the letter, and John will record a short video walking through what it means and what we would do about it. No charge, no obligation, and no need to decide anything afterwards.

Enquiry defence

Defending an R&D claim is not administrative work. It is an argument about what was scientifically or technologically uncertain at the time, why the people doing the work could not simply look the answer up, and how the costs claimed relate to that work. HMRC’s own guidance is the ground it is fought on, and the response has to be written by someone who understands both the engineering and the rules.

That is what we do here:

• We handle the enquiry end to end, including all correspondence with HMRC, so you are not drafting letters about your own technology.
• We review the original claim first, and tell you honestly what we find — including where it is weak.
• We write the technical defence ourselves, grounded in the engineering rather than in boilerplate.
• We take on claims we didn’t prepare, including ones where the original adviser is no longer around.
• We review claims before they are filed, where you would rather not be here at all.

John Mapother handles enquiry work personally. The record below is his.

Our enquiry record

250+

Claims prepared since 2019

6

HMRC enquiries into claims we prepared

6

Defended successfully

£232

The only adjustment HMRC has made to a claim we prepared

We publish the detail rather than a headline percentage, because an enquiry is a documented event and you should be able to weigh it yourself.

Over the last five years we have prepared around fifty R&D claims a year. HMRC opened enquiries into six of them. All six were defended successfully. One claim was reduced by £232, the result of an accounting error rather than any challenge to whether the work qualified. The other five were accepted without reduction.

Two of these enquiries are written up in full, with the clients’ agreement:

• Midbass Distribution — a seven-month HMRC review, with the claim accepted in full in both years.
• Advent Insurance Management — a claim concerning large-scale data consolidation, settled in full after HMRC challenged it.

We do not publish a success-rate percentage. Figures of that kind are calculated differently by every firm that quotes one, and we would rather give you the actual count and let you ask us about any of it.

Claims we did not prepare

We are also asked to take on enquiries into claims we had nothing to do with — usually prepared by the company itself, sometimes by an adviser who is no longer there. We have handled three, and all three ended as well as they could have.

The one that went to appeal

The company had prepared its own claim. HMRC rejected it, and the dispute went all the way to an appeal listed at the First-tier Tribunal. Shortly before it was heard, HMRC’s legal team asked for a without-prejudice call. That call lasted half an hour, and at the end of it they accepted the claim in full.

The work had always qualified. What it had never had was someone able to explain why, in the language HMRC’s own lawyers use.

The one where the money had already been paid out

The company had done genuine scientific research. Its previous adviser had described the project to HMRC as software development, which it was not — and had never filed a technical report at all. About thirty days into the compliance check, that adviser’s firm ceased trading, leaving the client to answer HMRC alone with a credit of around £47,000 already received and repayable if the claim failed.

We wrote the technical report that should have been written in the first place. HMRC accepted it without question and closed the check without adjustment.

The one that did not qualify

A press tooling company had spent months developing a deep drawn component. The work was difficult and the cost was real, and they had read HMRC’s guidance themselves and concluded in good faith that it qualified.

It did not. What they had done was competent professionals refining existing technology to solve a demanding problem, which the guidance places explicitly outside the definition of R&D. Difficulty is not the test; advancing the field is.

Once we had taken the director through the rules properly, he agreed. From that point the question was no longer whether the claim could be saved, but what the best available outcome was — and that was closing it without a penalty. So rather than keep arguing, we wrote to HMRC setting out why the company had believed the work qualified, and that on fuller understanding of the rules it accepted that it did not. The claim fell away and no penalty was charged.

That last case is the one worth understanding. Where a claim is sound, the job is to prove it. Where it is not, the job is to limit what it costs you — and a claim made in good faith and corrected promptly is treated very differently from one defended past the point of belief.

A review that can only ever conclude your claim is sound is not a review. If a claim is defensible, we will defend it, through to a tribunal if that is where it goes. If it is not, we will tell you plainly and early, while the position is still yours to put right.

Talk to the person who would handle it

One call with John, who has defended every enquiry described on this page. He will tell you what you are looking at and whether we can help — including if the answer is that you don’t need us.

Book a call

General guidance only, not advice on your specific circumstances.