Why the tech sector is facing rising HMRC enquiries

HMRC scrutiny of R&D tax relief claims has tightened significantly in recent years, with enquiry rates rising across the market. While this shift is driven by efforts to reduce fraud and improve compliance, it has also resulted in a disproportionate number of enquiries for companies operating within certain IT-related SIC codes even where projects are clearly eligible.

For businesses in these sectors, this increased scrutiny has created uncertainty and frustration. Enquiries can delay the receipt of benefit, tie up internal resources, and, in some cases, jeopardise claims entirely. In this environment, the quality, accuracy, and defensibility of R&D tax claims matter more than ever.

Why enquiry rates are climbing

HMRC’s heightened focus stems from efforts to tackle non-compliant claims and perceived abuse in the R&D schemes. While this tightening of standards aimed to improve overall integrity, the practical impact has been broad and blunt. In the IT-related SIC codes facing the most scrutiny, there are possible reasons for HMRC’s targeted approach:

• High volumes of historically poor-quality claims submitted by companies within these SIC codes.
• Inconsistent or insufficient project documentation, which raises questions even for otherwise eligible projects.
• SIC code classifications that fail to represent the real R&D activities taking place within individual companies.

The result is a sector where legitimate innovators are being swept into the same net as non-compliant claims.

Futureproofing your claim

To de-risk your R&D claims against facing enquiries, it is important to establish strong compliance practices long before submission. We recommend the following best practices:

1. Clear, well-structured documentation is essential, capturing not only what the project involved but also the key criteria that establish its eligibility under the scheme. This includes detailing the technical uncertainties addressed, how the work advances your industry, and the decision-making processes behind the project. Moreover, we also recommend outlining the specific experimentation required to undertake the R&D in the first place.
2. Robust, detailed and accurate financial records that align seamlessly with your technical narrative further reduce the risk of enquiry. Calculations can be complex and prone to error, so having all raw data and quantitative evidence clearly formatted and traceable at every step strengthens the credibility of the project.
3. It is also important to review your claim methodology regularly to reflect evolving HMRC guidance and sector-specific expectations. Human error can never be fully eliminated, so adopting rigid progress tracking and a thorough review process is crucial.
4. Lastly, seeking specialist input early in your claim process, even at the outset of the R&D project, can significantly enhance the legitimacy of your claim. Having experts validate eligibility, structure your evidence and stress test your approach offers a layer of assurance that strengthens the submission and reduces exposure to future enquiries.

Why proactive defence matters in tech

In today’s climate, enquiries are no longer a remote possibility. For businesses operating at the forefront of digital innovation, the question isn’t if HMRC will ask for more detail, but when.

A consultancy that integrates enquiry defence into every claim is no longer a luxury; it’s essential risk management. In high scrutiny SIC codes, it can mean the difference between a smooth claim and a prolonged challenge.

A focus on precision is a key factor of our success

Our claim methodology is built on robust technical documentation, transparent communication with HMRC, and sector-specific expertise. This is how we ensure that every claim stands up to scrutiny. This approach has ensured that our clients remain protected even as HMRC’s stance has hardened. In 2024, our claims achieved an enquiry rate of just 3.6%, compared with HMRC’s reported 20% industry average. We also successfully closed more enquiries than were opened last year.

Your innovation deserves expert protection

Whether you’re preparing your R&D claim or navigating an existing enquiry, Ayming provides the experience, scale, and technical rigour needed to protect your innovation. We include enquiry defence in every engagement, so our clients can proceed with confidence that their position is fully safeguarded. With 40 years’ experience, 1,600 employees, 14 global offices, and £1bn+ in R&D tax relief claimed for our UK clients, we ensure every claim stands up to scrutiny.

If rising HMRC scrutiny is a concern, or you simply want a more resilient, compliant approach, our team is ready to help you claim with confidence.