You submitted your R&D tax credit claim. Months later, a letter arrived from HMRC. It might have said “we’re making enquiries into your claim.” It might have said the claim was not accepted. It might have asked for supporting documentation. Whatever it said, you’re now wondering what went wrong — and what happens next.

This article explains exactly what an HMRC R&D enquiry means, what your options are at each stage, the most common reasons claims are rejected, and what a well-prepared claim looks like so you can avoid this situation going forward.

Understanding the Different Types of HMRC R&D Contact

Not all HMRC contact about your R&D claim is the same — and the appropriate response varies significantly depending on the type of correspondence you’ve received.

Type 1: Information Request (Pre-Enquiry)

HMRC can send information requests about your R&D claim without formally opening an enquiry. These might ask for additional documentation — your technical narrative if not already submitted, time records, or details of specific projects. Responding promptly and fully is almost always the right approach. Many claims at this stage are accepted following a straightforward information exchange.

Type 2: Formal Enquiry Notice (S9A Notice)

If HMRC formally opens an enquiry into your tax return (which includes your R&D claim), you’ll receive a notice under Section 9A of the Taxes Management Act 1970. This is a formal legal step with specific timelines and processes. You have the right to professional representation, and HMRC is required to follow a defined process.

Type 3: Amendment to Self-Assessment

HMRC may issue an amendment to your self-assessment return, reducing or removing the R&D claim. You have the right to appeal this amendment within 30 days of the amendment notice.

Type 4: Rejection of a Repayment Claim

If your R&D claim resulted in a request for a cash repayment (common for loss-making companies), HMRC may decline to make the repayment pending enquiry. The claim isn’t necessarily permanently rejected — but the payment is withheld while HMRC investigates.

Why Are HMRC Enquiries Increasing in 2025?

HMRC’s 2025 approach to R&D tax credits is more aggressive than in any previous year. The context matters.

Between 2020 and 2024, HMRC identified approximately £4.1 billion in fraudulent or erroneous R&D claims. A significant portion of this was attributed to “specialist agents” — firms set up specifically to submit R&D claims, often with little expertise or due diligence, charging percentage fees and accepting essentially every client regardless of whether they qualified.

HMRC’s response has been systematic:

• A mandatory random enquiry programme targeting a sample of all R&D claims
• Sector-based risk models identifying claims in construction, software, and fintech as higher risk
• Agent-based scrutiny — firms whose claims repeatedly fail checks are flagged, and their entire client portfolio is subject to increased scrutiny
• Prosecution of the most egregious cases under the Criminal Finances Act 2017

The practical effect is that companies who submitted genuinely qualifying claims through well-prepared processes are experiencing delays and information requests — while companies whose claims were questionable are facing formal enquiries and rejections.

The Most Common Reasons R&D Claims Are Rejected

Understanding why claims fail is the most useful information for protecting future claims. HMRC’s published data and our direct experience with enquiry responses point to these as the primary failure points:

1. Activities that don’t meet the technical definition

The single most common reason for rejection. The technical narrative describes activities that are genuinely complex, innovative, or challenging — but don’t meet HMRC’s specific definition of “advance in science or technology through the resolution of scientific or technological uncertainty.”

Examples that commonly fail:

• Implementing technology that others have already developed and proven
• Creative or artistic work reframed as technological development
• Business process improvements without underlying technology advance
• Software customisation using established platforms and tools

2. Generic or recycled technical narratives

HMRC’s processing systems can detect identical or near-identical narrative language across multiple submissions from the same advisor. Claims where the narrative is clearly templated rather than genuinely describing the company’s specific activities are queried. A technically accurate description of company X is not an accurate description of company Y, even if both made software.

3. Staff time allocation unsupported by evidence

Claiming that 70% of a developer’s time was on qualifying R&D when they worked primarily on customer delivery will fail if HMRC requests timesheet records. In a formal enquiry, HMRC will ask for contemporaneous evidence of time allocation — not retrospective estimates.

4. Subcontractor costs over-claimed

Only 65% of subcontractor costs qualify under the SME scheme. Claiming 100% of subcontractor costs is a common error. Additionally, costs incurred with subcontractors who were resolving the uncertainty independently (rather than under your direction) don’t qualify at all.

5. Baseline of knowledge not established

The narrative needs to demonstrate that the advance claimed wasn’t already publicly available. If a company claims to have advanced the state of knowledge in an area where published academic or commercial solutions already exist, HMRC will question why the company didn’t simply use the existing solution.

6. No advance achieved — iterative improvement framed as innovation

Making something faster, cheaper, or better without resolving a fundamental technical uncertainty is not R&D under HMRC’s definition. Improving an existing process by applying existing knowledge is not an advance in science or technology.

What to Do If You’ve Received an Enquiry Letter

1. 1

   Don’t ignore it and don’t panic

   An enquiry letter is not a conviction. The majority of HMRC R&D enquiries at the information-request stage are resolved with additional documentation. Reading the letter carefully and noting any response deadlines is the immediate priority.

2. 2

   Contact the advisor who prepared your claim

   If you used an R&D advisor to prepare the claim, contact them immediately. They have a professional obligation to support you through an enquiry — if they refuse or are unresponsive, this tells you something important about the quality of the firm.

3. 3

   Gather your contemporaneous documentation

   Collect project records, meeting notes, technical reports, staff time records, and any other documentation that evidences the R&D activity as it happened — not reconstructed for the enquiry. This is your defence.

4. 4

   Respond within the deadline

   Missing HMRC response deadlines escalates the enquiry and limits your options. If you need more time, contact HMRC (or have your advisor do so) to request an extension — they usually grant reasonable requests.

5. 5

   If the claim is rejected, consider appeal

   A formal rejection can be appealed to the First-Tier Tribunal. This is a significant undertaking, but for substantial claims that you believe genuinely qualify, it may be worth pursuing with professional representation. The success rate at tribunal for well-evidenced claims that were rejected on technical grounds (rather than fraud) is reasonable.

How Well-Prepared Claims Avoid Enquiries

Not all claims receive enquiries. HMRC’s own published data suggests that claims submitted through reputable advisors with good track records have significantly lower enquiry rates than claims submitted through high-volume agents with poor compliance histories.

The features of claims that sail through HMRC without query:

Specific, evidenced technical uncertainties: Not “we developed new software” — “we sought to advance the state of knowledge in distributed real-time data synchronisation under [specific conditions], where existing approaches [named approaches] failed to achieve [specific performance targets].”

Documented investigation process: Notes showing what was tried, what failed, what was learned, and how that learning shaped the next iteration. This is the “systematic investigation” HMRC requires — not just an outcome, but a process.

Plausible and documented staff time: Time allocations that match project records and make sense given the scale of the project. If you’re claiming 30% of a team of 5 for one quarter, the project activity should be consistent with that in other contemporaneous records.

Accurate subcontractor treatment: Costs calculated at 65% where appropriate, with clear explanation of the nature of the subcontracted work.

A real baseline check: Evidence that the advance claimed wasn’t already publicly available — literature references, competitor capability assessments, or a straightforward statement of why existing solutions didn’t solve the problem.

Protecting Your Next Claim

Whether your current claim is under enquiry or you’re preparing your first claim, the most important thing you can do is ensure the claim is built on solid foundations from the outset.

This means:

• Engaging an advisor who applies strict intake criteria — who will tell you if activities don’t qualify rather than accepting everyone
• Ensuring the technical narrative is genuinely specific to your company’s activities — not templated
• Documenting time allocation as accurately as possible, ideally with project management system exports
• Keeping evidence of your R&D activity as it happens — not reconstructing it later
• Choosing an advisor who remains accountable for the claim after delivery — not one who disappears after sending the PDF

Frequently Asked Questions

HMRC asked for my technical narrative and I don’t have one. What now?

If your claim was submitted without a technical narrative (your accountant may have included R&D figures in the CT600 without a supporting report), you should prepare one now. It’s possible — though harder — to prepare a retrospective narrative from project records. An experienced R&D advisor can help you reconstruct the narrative from contemporaneous evidence. This is a salvageable position in most cases.

My R&D advisor has gone out of business. What do I do?

This is more common than it should be. You’ll need to engage a new advisor who can review the original claim and prepare the response to HMRC’s enquiry. Bring any documentation you have from the original claim preparation. The new advisor will need to assess whether the original claim was defensible before advising on how to respond.

If HMRC queries my claim, does that mean they think I committed fraud?

No. The majority of HMRC R&D enquiries are compliance checks, not fraud investigations. HMRC distinguishes between “error” (genuine mistakes in claiming) and “fraud” (deliberate misrepresentation). Most enquiries are resolved as compliance corrections without any suggestion of fraudulent intent.

How long does a typical HMRC R&D enquiry take to resolve?

Simple information-request enquiries that are resolved with documentation typically close within 2–4 months. Formal enquiries on substantive technical grounds can take 6–18 months. Enquiries involving allegations of fraud can take significantly longer and may involve criminal investigation, though this is rare for companies that genuinely believed they were qualifying.

Can I continue claiming R&D credits while under enquiry for a previous year?

Yes. An HMRC enquiry into one tax year does not prevent you from submitting claims for subsequent years. However, HMRC may flag subsequent claims for enhanced scrutiny if an earlier year is under enquiry. Ensuring subsequent claims are of the highest quality is particularly important in this situation.

This article provides general guidance only and does not constitute tax or legal advice. If you have received correspondence from HMRC regarding your R&D claim, seek professional advice promptly.