North Yorkshire-based financial services business

We were asked to meet with a North Yorkshire based financial services business, by their Accountant, to assist them in defending an HMRC R&D enquiry. A claim had been filed, and enquiry raised, and the Accountant had tried to defend the claim through written correspondence. HMRC had met with the client to discuss their claim, was still not satisfied with the answers and had given them one final chance to prove eligibility.

Due to a perceived lack of helpfulness, HMRC were suggesting in addition to penalties for deliberate errors, they would also enquire into all other taxes (personal taxes, VAT etc) of both the business and its directors.

Our assessment of the business was that unfortunately on this occasion they weren’t carrying out eligible R&D activity and therefore weren’t eligible to claim R&D Tax Credits. Our assistance therefore was to assist the client and Accountant in trying to liaise with HMRC, limit the damage and extract themselves out of the situation in the best way.

Whilst the relationship between Accountant and client was strained, and the claim denied, we assisted the business, took over negotiations with HMRC which resulted in no penalties being suffered or other taxes being enquired in to.

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