A report by the BBC published on 4 August sensationally announced that £4.1 billion of taxpayer money had been lost due to ’error and fraud’ in R&D tax credits and relief since 2020 – against a backdrop of accusations from Governments old and new around gaps in the public purse.
However, says randd uk, the R&D tax relief specialist, reporting on the subject has been misinformed, representing an outdated approach to relief schemes which HMRC itself is attempting to overcome.
The BBC’s comments relied upon data from 2020 to 2024, with comments highly critical of the scheme drawn from 2022-23 – including a particularly scathing comment from Colin Haley before the House of Lords Committee, naming the R&D tax landscape ‘the Wild West’ and advisory firms ‘outside advisers’ and ‘cold-callers’.
randd uk cautions taxpayers and business owners against taking the report at face value, as a combination of outdated data, charged language around the payment of Corporation Tax and carefully selected comments from critics bias reporting against the R&D tax schemes.
Additionally, says the firm, such reporting is seen by the sector as an attempt to draw R&D tax and genuine claimants into a political battleground, as parties attempt to find a scapegoat for unbalanced public books.
Adam Bointon, Technical Director at randd uk, said: “We acknowledge that R&D tax relief has historically been a point of contention with the taxpayer, and that error and fraud have been an issue in the past.
“However, this is exactly what HMRC and the Government tackled with the overhaul of the scheme, the introduction of more enquiries into claims and the requirements for the Additional Information Form.
“While informed by a number of sources, the BBC’s reporting relies upon too many comments and data points from before these measures were brought into place – meaning it does not at all reflect the current R&D tax landscape.
“Data from the new scheme is yet to be collected and released, so it is impossible to provide a holistic judgement based on the facts of the scheme as it is today.
“Attempts at doing so will paint the scheme and operators like us within the sector in a negative light, with data that’s out of date and based on a scheme that no longer exists in its previous form.
“While the report does acknowledge that instances of error and fraud have fallen over time, it remains true that these conclusions have been drawn based on old data.
“For now, we’d urge all news outlets, businesses, firms and fellow R&D tax specialists to avoid colouring the scheme negatively as new compliance measures bed in and begin to take effect. Anything else is a premature conclusion which could be harmful to genuine innovation.”
