HMRC has recently released further guidance regarding the types of claims that are eligible for R&D tax relief, with care home businesses being given a red flag.
In April 2022, we shared our thoughts on social care R&D claims being a bit too good to be true, as many of our social care clients were getting ‘cold called’ by unregulated R&D tax credit boutiques, promising substantial corporation tax refunds.
A year on, HMRC has now announced updated GOV.UK guidance regarding R&D tax relief claims which went live on 1 April 2023.
It seems they have taken steps to be as clear as possible upfront regarding eligibility, with their summary page listing the ‘Typesofclaimswhich arerarelyeligibleforR&Dtaxreliefs…’with ‘care homes’ being top of the list, followed by ‘childcare providers’.
We do not recall this being made so explicit in previous HMRC/government communications,
and is therefore a strong indicator that HMRC will be more likely to open enquiries into claims made by care home businesses.
With the increase in the number of HMRC enquiries on R&D claims that we are starting to see in general, this updated guidance should now serve as a particular ‘red flag’ for claims made within the social care sector.
So, is this a response to help clamp down on those unregulated companies selling false promises, which lead operators to submit a not-so innovative claim based on time spent by staff writing/updating care plans?
Either way, at least there is now further clarity, from a trusted source. If you would like more information or support, please do get in touch.
RACHAEL ANSTEE Partnerrachael.anstee@hazlewoods.co.uk