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For the past three years, the phrase most associated with R&D tax relief among accountants has probably been enquiry risk rather than innovation and we understand why given the changes.
That balance has just shifted, at the R&D Communication Forum earlier this year, where HMRC confirmed it is ending the volume compliance approach that has defined the compliance landscape since 2022.
It is a genuine change of direction, not a minor administrative tweak and it is worth understanding what it means for you before your next round of client claims are submitted.
What the volume approach actually was
Since 2022, HMRC’s Individual and Small Business Compliance directorate (ISBC), ran R&D enquiries through its Campaigns and Projects Team at a scale the relief had never seen before.
The enquiry rate rose from around one per cent of claims to more than 20 per cent and in December 2023 HMRC’s own Chief Executive, Jim Harra, told the House of Commons Public Accounts Committee that one in five claims was being checked.
The approach favoured automation and scale over nuance and much of the caseload was handled by staff with little previous experience of scrutinising R&D tax relief claims.
The collateral damage to legitimate claimants, particularly smaller companies, was is believed to have been considerable and it drove many accountancy firms away from supporting claims.
What replaces it
From April 2026, R&D compliance work largely moved into the Wealthy and Mid-Sized Business Compliance directorate (WMBC), which has run R&D enquiries for over twenty years and is taking on far greater responsibility now that ISBC’s volume campaigns are winding down.
WMBC has traditionally worked differently to ISBC, as cases are typically run by a named caseworker rather than a central team and there is more willingness to resolve points on a call rather than through rounds of correspondence.
HMRC has said the focus going forward will be on complex risks rather than broad sampling, although the department has not yet set out in detail what that will mean in practice.
The numbers behind the decision
HMRC’s Annual Report and Accounts for 2025 to 2026 gives some sense of why the volume approach is being retired.
Estimated error and fraud in the relief has fallen to an estimated 5.3 per cent for 2024/25 and is projected to remain stable in 2025/26.
That compares with a revised estimate of 6.4 per cent for 2023/24, itself down from the 7.8 per cent originally reported for that year in HMRC’s 2023 to 2024 annual report.
Over the same period, R&D relief spend has actually increased, to around £8 billion in 2025/26 from £7.7 billion in 2023/24.
Falling error and fraud alongside rising claimed relief points to a compliance regime that has largely done its job.
What this does not change
Easing off volume enquiries is not the same as easing off scrutiny generally.
HMRC’s other compliance tools remain in place, including checks run by the Fraud Investigation Service and the various nudge and concern letters that sit outside the formal enquiry process altogether.
Concern letters in particular ask a company to review its own claim and, if it agrees there is a problem, amend it voluntarily.
Unlike a formal Section 9A enquiry, there is no statutory right of appeal attached to these letters, which makes them worth taking just as seriously as an enquiry notice when one lands on a client’s desk.
What to tell clients now
The headline is genuinely positive and worth clients who have been nervous about claiming or who quietly dropped a claim after a difficult experience with ISBC in recent years should have a reasonable case for revisiting that decision.
It is worth pairing that message with a caveat though, as WMBC’s complex risk focus is likely to mean fewer but more thorough enquiries, so claims should if anything be built to a higher evidential standard rather than a lower one.
A named caseworker with real R&D experience is more likely to spot a thin technical narrative than an automated volume check ever was.
randd uk supports accountancy firms through exactly this transition, from strengthening the technical evidence behind a claim to handling correspondence if HMRC does open an enquiry under the new WMBC structure.
If you have clients who paused their claims during the volume compliance years, we are happy to help you assess whether it is worth them starting again.
To be more confident in supporting valid R&D tax relief claims, speak to our team today.
Adam Bointon is a Technical Director specialising in R&D Tax Credits for SMEs in manufacturing and software sectors. With over 15 years’ experience, he works closely with businesses to identify qualifying R&D activities and prepare clear, compliant claims. He combines technical expertise with a strong understanding of economics and finance to support successful outcomes. Adam also contributes to industry webinars and CPD sessions, sharing insights on R&D tax relief and HMRC requirements.
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