Skip to main content

Research and Development Tax Credit

Volume 460: debated on Thursday 17 May 2007

To ask the Chancellor of the Exchequer what estimate he has made of the amount of tax relief wrongly claimed under the Research and Development Tax Credit Scheme; and whether he has set up a special unit to investigate abuses of the Scheme. (137048)

Since the introduction of the relief in April 2000 no companies have been convicted of making fraudulent claims to relief.

HMRC adopts a risk-based approach to the interventions it undertakes. As with other elements of companies’ tax returns and computations, claims for R and D tax credits are subject to risk assessment procedures. Where significant risks are identified they are pursued through a variety of interventions one of which involves opening an inquiry into the company tax return or claim.

In response to consultation HMRC opened seven specialist R and D units in November 2006. The units will improve the consistency of dealing with claims and their role is to encourage and help companies to make claims to R and D relief while ensuring that any instances of non-compliance are effectively and efficiently handled.