How do I respond to an HMRC R&D enquiry letter?

Identify whether HMRC has opened a formal enquiry into the return, is asking informal questions before deciding whether to open one, or has issued a formal Schedule 36 information notice. Each carries slightly different obligations and deadlines, and the letter should say which it is.

Note the deadline given for a response and diarise it immediately. HMRC generally allows a reasonable period, but this can feel short once you factor in gathering evidence from technical staff who may no longer all be with the company.

Do not respond immediately with a rushed or partial answer just to be seen to reply quickly; a well-prepared response within the deadline is far more valuable than a fast but weak one.

HMRC's R&D queries usually fall into two categories: questions testing whether the work meets the statutory definition of qualifying R&D under Part 13 Corporation Tax Act 2009, and questions testing whether the specific costs claimed are eligible expenditure under the scheme rules.

Read each question in the letter separately and map it to a specific project or cost category in your original claim, rather than answering in generalities. HMRC caseworkers are trained to spot answers that do not directly address what was asked.

If the letter references the BEIS/DSIT guidelines on the meaning of R&D, expect the focus to be on whether a competent professional could have readily resolved the technical uncertainty — this is the heart of most enquiries.

Go back to contemporaneous project records — design documents, version control history, test results, meeting notes, and time records — rather than relying purely on the narrative originally submitted with the claim.

Involve the engineers, developers or scientists who actually carried out the work in drafting the technical answers; HMRC gives far more weight to detailed, specific accounts from the people involved than to generic descriptions from an adviser.

Where cost queries are raised, reconcile the figures claimed back to payroll records, subcontractor invoices and time allocation methodology so every number in the response is traceable.

You are responsible for ensuring the company responds accurately and on time, even where an external adviser is coordinating the reply. Review the final response before it is sent.

If you genuinely cannot meet the deadline, write to HMRC before it passes explaining why and proposing a realistic new date — this is usually accepted if requested reasonably in advance.

Consider whether the original claim's evidence base was strong enough to survive scrutiny; if it was not, an honest, well-argued partial concession sometimes produces a better outcome than an over-stretched defence of every point.

Preparing a thorough response takes meaningful time from both technical staff and advisers, particularly where the original claim file is thin or was prepared by an adviser who is no longer available.

Growth plan clients have free tax investigation insurance included, covering our fees for managing a response to an R&D enquiry letter from start to finish — see /fees.

The cost of a rushed, weak response is usually far higher in the long run, since it can lead to a wider enquiry, an assessment, and penalties.

Do not send a response drafted purely by the finance team without input from the people who did the technical work.

Do not ignore part of a multi-part letter; unanswered questions often prompt a wider and more sceptical follow-up enquiry.

Do not assume one clear response ends the matter — be prepared for follow-up questions or a request for a call or meeting.