Many people assume that if HMRC has concerns about an R&D tax relief claim, they’ll open an enquiry to investigate. However, that’s not always the case.
HMRC can reject a claim outright without launching an enquiry, often due to administrative issues.
That’s why getting the details right from the start is so important.
Key reasons for rejection
- Failure to notify HMRC – If your client is required to submit an Advanced Notification Form (ANF) for their R&D claim and fails to do so, their claim may be removed automatically.
- Missed deadlines – R&D tax relief claims must be submitted within two years from the end of the accounting period. If the claim is filed late, HMRC has no obligation to consider it, regardless of eligibility.
- Incorrect filing of the Additional Information Form (AIF) – An AIF is now mandatory for all R&D claims. If your client does not submit an AIF, their claim will be rejected. Additionally, if the AIF is submitted incorrectly or in the wrong order relative to the Corporation Tax Return, HMRC may issue a correction notice instead of raising an enquiry.
- Failure to meet AIF requirements – Simply filing an AIF isn’t enough – it must meet all HMRC’s requirements, including providing detailed explanations of the R&D activities, costs, and qualifying criteria. Any omissions could result in an automatic rejection.
Can you fix the error?
If HMRC rejects a claim via a correction notice rather than an enquiry, there may still be an opportunity to resubmit the claim, provided the statutory deadline hasn’t passed.
If deadlines have lapsed, the claim is unlikely to be recoverable, making careful planning essential.
How to avoid R&D claim rejection
To prevent outright rejection, ensure your client:
- Files an R&D notification (if required) on time.
- Meets all submission deadlines.
- Completes the AIF accurately and submits it correctly.
By staying on top of these requirements, you can protect your clients’ claims and maximise their chances of securing the R&D tax relief they deserve.
Worried your client’s R&D claim could be rejected? Get in touch with our consultants for expert support.
