Avoid Costly Errors: The Truth About DIY R&D Tax Credit Claims

At Alexander Clifford, we speak to UK businesses daily who enquire about all areas of R&D tax relief, and one common query is whether it is wise to submit an R&D tax credit claim yourself without specialist support.

While HM Revenue & Customs (HMRC) allows companies to submit R&D tax relief claims independently, we urge you to read this article which will explain the hidden risks that could occur during a DIY R&D tax relief claim. With HMRC continuing to tighten the compliance standards, businesses need to understand the hidden risks of claiming R&D tax credits by themselves. This article explores the key DIY R&D tax claim risks, explains HMRC’s requirements and helps you decide whether you should do your own R&D tax credit claim or seek advice from the experts.

Can I submit an R&D tax credit claim myself in the UK?

Yes, it is acceptable for you to file R&D tax credit claims yourself in the UK. R&D tax relief is claimed through the Company Tax Return (CT600) and must be supported by preparing in-depth technical information about your projects, including your R&D expenditure. HMRC requires companies to demonstrate that their projects set out to achieve a scientific or technological advancement and that the work involved scientific or technological uncertainties which could not be readily resolved by a competent professional.

In addition to submitting the Company Tax Return (CT600), companies must complete an Additional Information Form (AIF), which sets out the project details, the technical basis of the R&D claim, the qualifying costs being claimed and details of who prepared the submission. 

While resources such as the HMRC R&D eligibility tool can provide an initial indication of whether a project may qualify, they are not a substitute for professional expertise, particularly when preparing a defensible and compliant claim. Through our experience of advising businesses, we frequently see DIY research and development tax credit claims rely too heavily on these tools without a full understanding of the eligibility criteria or how HM Revenue & Customs assesses R&D tax relief claims in practice.

What are the eligibility risks of a DIY R&D tax claim?

When businesses have self-prepared their own R&D claim, we occasionally see misunderstandings of the eligibility criteria. Many companies assume that they will automatically qualify if they have developed new software, improved internal processes, or even created a new product. However, in reality, HMRC applies a strict definition that focuses on whether the project sought to achieve a genuine scientific or technological advancement, and if it involved any scientific or technological uncertainty that could not be readily resolved by a competent professional. Where these principles are not clearly demonstrated, HMRC may challenge or reject the R&D tax credit claim, even if there is evidence of genuine innovation. As R&D tax specialists, we see that this is a common pain point for those who have encountered issues during the claim process or, in some cases, having their R&D tax credit claim being rejected.

Why does documentation quality matter so much to HMRC?

The quality of your documentation is vital and can play a significant factor in HMRC’s assessment process. HMRC expects a clear and detailed technical explanation including all scientific or technical uncertainties faced, why they couldn’t be easily resolved and also how your project attempted to overcome these uncertainties. Financial calculations must comply with either the new merged R&D expenditure credit scheme or Enhanced R&D Intensive Support (ERIS) scheme, meaning they must comply with the following:

• Be well-evidenced
• Clearly linked to the qualifying activity
• Be listed as accurately as possible

Where documentation lacks detail or fails to clearly connect expenditure to eligible R&D work, HMRC is more likely to question the validity of the claim. In our experience, DIY claims will often contain vague descriptions, generic language or weak cost distribution. These vulnerable areas are frequently flagged during HMRC reviews and can lead to delays in claims, enquiries from HMRC or even penalties for incorrect R&D claim information.

How have recent HMRC changes increased the risks of DIY claims? 

There have been recent changes to the R&D tax relief regime that have further increased the risks associated with self-submitted R&D tax credit claims. Since these changes were introduced, we have seen an increase in enquiries where businesses fail to submit the correct information or apply outdated rules to their claim. These concerns are particularly common where companies have attempted to claim R&D tax credits for their project without seeking specialist advice. This can result in repayments being delayed, withheld or in some cases, the claim being rejected entirely by HMRC.

What happens if HMRC challenges your R&D tax claim?

Businesses must be aware of HMRC’s R&D tax relief rules and eligibility criteria before submitting any R&D tax relief claim. Our team of dedicated specialists has supported clients through their R&D claims with HMRC and understands the significant impact of an incorrect claim. HMRC has the authority to open formal investigations, withhold R&D tax relief payments or recover previously paid credits if a claim is later found to not be compliant. In some cases, penalties for incorrect R&D claims and interest charges may also apply.

Accountant vs R&D tax specialist: who should handle your claim?

Many companies confide in our team at Alexander Clifford after weighing up the pros and cons of an accountant vs R&D tax specialist for their R&D tax credit claim. While accountants are essential for preparing statutory accounts and CT600 filings, R&D claims will require an R&D tax specialist in order to receive the correct technical and legislative knowledge. This is where we can help identify and solidify your claim.

Should you do your R&D tax credit claim yourself?

While it is possible to submit an R&D tax credit claim yourself, the increasing complexity of the R&D process and HMRC’s heightened scrutiny mean that DIY claims now carry a higher level of risk than in previous years. Working with a specialist can help ensure that your claims are clear, defensible and compliant, reducing exposure to delays, penalties or further enquiries from HMRC. At Alexander Clifford, our role is to support businesses across the UK in successfully claiming R&D tax relief confidently and compliantly, allowing them to focus on innovation while we manage the compliance process.

If you would like further guidance on whether you should do an R&D tax credit claim yourself, please do not hesitate to contact a member of our team.