R&D Claim Defence During HMRC Enquiry for Medical Clinic

When a specialist clinic in the medical and psychotherapy sector received an HMRC compliance check on their R&D claim, their original adviser declined to assist, stating that enquiry support was not included in their engagement.

dns stepped in mid-enquiry, conducted a full review of the existing submission, and identified critical weaknesses in the report. We completely reconstructed the technical narrative and supporting documentation, ultimately securing a successful outcome with the claim upheld.

A specialist clinic operating within the medical and psychotherapy sector, delivering clinically led research and development activities through qualified healthcare professionals.

The client had previously engaged a third-party R&D consultancy to prepare and submit claims for two consecutive financial years.

Following the HMRC compliance check notice, the client approached their original R&D adviser for support. However, they were informed that enquiry handling fell outside the agreed scope of work.

With an active enquiry and no professional support, the client engaged DNS to manage the situation.

Our initial review of the submitted R&D report revealed several key issues:

• Generic technical narrative lacking alignment with the clinic’s actual activities
• Insufficient explanation of scientific and technological uncertainties
• Weak justification for staff cost apportionment
• Poor linkage between qualifying activities and the employees included in the claim

These gaps significantly increased the risk of claim rejection.

DNS took full control of the enquiry process and implemented a structured response strategy:

• Conducted a detailed audit of the original submission to identify all areas of risk
• Collaborated closely with the client to rebuild an accurate and detailed account of R&D activities
• Completely rewrote the technical report, clearly defining:
  • The scientific challenges faced
  • The uncertainties addressed
  • The role of competent professionals
  • The iterative development process
• Developed a robust and transparent cost methodology to support staff apportionment
• Prepared a comprehensive HMRC response, addressing each query with clear explanations and supporting evidence

• HMRC enquiry successfully resolved with the R&D claim fully upheld
• Tax relief secured across both financial years under review
• A compliant, well-documented, and defensible R&D report established
• Client transitioned to DNS for ongoing R&D advisory and compliance support

• Immediate intervention during a live HMRC enquiry
• Transformation of a weak, generic report into a robust and defensible submission
• End-to-end management of the enquiry process
• Protection of valuable tax relief and mitigation of compliance risk
• Restored client confidence during a critical situation