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If you are a small to medium sized business which has been investing in research and development (R&D) specifically over the last five years or so, then you may have been advised that you can claim tax relief from the government.

Whilst there are R&D tax reliefs available, you may have been misadvised by your tax adviser and could have a negligence claim against them to recover any losses.

About research and development tax relief

In 2007, the government introduced guidance regarding R&D tax relief to incentivise businesses to invest in R&D. The reliefs support companies that work on innovative projects in science and technology.

In August 2017, the guidance was updated to show who can make an amended claim to tax relief for reimbursed expenses, and how to make a claim for relief. In 2018, the guidance was updated again to reflect the new rates for the incoming tax year.

During this time, tax and financial advisers alike took to the market to highlight the existence of these reliefs to their clients and the benefits that these reliefs would have on their businesses, but some played fast and loose with the rules and exaggerated the R&D tax relief claims.

Where we are now

HMRC is in the process of reviewing the claims made for relief and is cracking down on those businesses which have incorrectly claimed relief and are issuing substantial tax bills to redress the arrears.

As a result, businesses are now considering whether they have a negligence claim against their tax advisers and if so, are considering whether they can recover their losses.

How can we help?

If your business has received tax advice about claiming R&D relief and you are concerned about the guidance they gave, or perhaps you are in receipt of an unexpected tax bill, please contact Juliet Schalker at js@debenhamsottaway.co.uk or 01727 735618.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.