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Research: Tax Allowances

Question for Treasury

UIN 135692, tabled on 7 March 2022

To ask the Chancellor of the Exchequer, what recent estimate he has made of the number of R&D tax relief advisers operating in the UK who are involved in submitting fraudulent or dubious claims for R&D tax reliefs; and what steps his Department has taken to tackle the activity of those advisers.

Answered on

10 March 2022

The Government is exploring broader options that consider the case for moving further towards statutory regulation of the tax advice market. As announced in November 2021, we will be consulting on this later in the year.

At Spring Budget 2021, the Government announced a review of R&D tax reliefs supported by a consultation. The consultation closed in June 2021, and at Autumn Budget 2021, the Chancellor announced a package of measures to target abuse and improve compliance. From April 2023, all claims will have to be notified in advance, be made digitally, include more details about the expenditure, be endorsed by a named senior officer of the company, and include details of any agent who has advised the company on the claim.

Information regarding the number of R&D tax relief advisers involved in submitting fraudulent or dubious claims is not available. HMRC’s programme of compliance activity addressing this risk posed by abuse of the R&D regimes spans fraudulent behaviour as well as other types of non-compliance, such as error and mistake, and therefore covers a wide range of agents and advisors.

HMRC has doubled the resource working on R&D non-compliance, is utilising data and intelligence to improve the risking process, and is undertaking a Mandatory Random Enquiry Programme to improve understanding of the level of error and fraud in the R&D regime.

Answered by

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