R&D Fraud on the Rise
Recently, Convergica (Clinical Information Systems), Ltd. came under fire as a £29.5m R&D tax claim was questioned. The company claimed this sum against a purported £137m used to develop an IT healthcare system. Their claim reported outsourcing programming work to Mediatronix, Ltd. Following an enquiry, it was proven that this payment was never made and the entire R&D claim was nullified. The three men involved were arrested and sentenced to a total of 21 years in jail.
Filing for tax credits should always be done with caution, on the conservative side, and with absolute certainty that you qualify. R&D tax credits often require expertise to ensure you qualify and outline your projects and costs appropriately. Yet some continue to abuse the system, causing the HMRC to tighten the reins on the tax credit.
The HMRC believes there is £311m of error or fraud in its R&D figures. With this in mind, the HMRC is on a mission to expose both fraud and error. It is important that you verify your claims legitimacy and ensure you have the appropriate R&D report to back up your claims.
To fight this, an additional CT600L form will be submitted with any R&D credit tax claim. This provides additional information for HMRC scrutiny and provides a greater transparency for enquiries.