What happens in an enquiry?
If an enquiry is started, the impact in the short-term will usually be a delay in the payment of the R&D tax credit and/or the tax repayment. An inspector will be appointed to the enquiry, and it will be their role to ask further questions about the R&D and the cost claims that have been submitted. The inspector will usually submit questions via either letter or email. They will usually also want to meet the competent professionals who have helped with the claim submission. With virtual meetings becoming more common, the enquiry can also appear as an agenda of questions that will be discussed on a call, especially if the industry, R&D, or project is complicated.
If the claim has been produced and submitted by Alexander Clifford, then we will be on hand to manage the enquiry process for you. We will take the lead and ensure you are aware of what additional information is needed and prepare you for meeting with the inspector if required.
If your claim has been produced and submitted by yourselves or a different company, we can still help by providing enquiry support.
Typically, enquires opened by HMRC are settled easily, as once the inspectors receive the additional information or explanations, they are satisfied that the original claim was accurate.
In these situations, the inspector will usually close the enquiry and arrange for the claim to be settled and the R&D tax credit and (or tax repayment) to be paid. If the inspector does not simply close the enquiry, then it is possible to reach an agreement in each of the enquiry focus points, and the enquiry then may be settled by negotiation.
