Reputable advisors are as scandalised by media reports of billions lost through research and development (R&D) claims fraud as anybody else. The regime gives a credit against corporation tax for ‘qualifying’ expenditure, and a cash repayment for loss-making businesses. It seems shady outfits submitted dodgy repayment claims on behalf of impressionable taxpayers, often small businesses, which were paid out before the tax man caught up with them. Those businesses are now paying the price; if they are no longer in business the taxpayer foots the bill.

That the regime to claim relief made such appalling behaviour possible seems remarkably careless. Equally, however, a knee-jerk reaction to reject valid claims going forward is an unfortunate consequence, putting innovative businesses off from making claims. 

Headlines about fraudulent claims do not change the underlying policy rationale for the relief: recognition of the public good arising from UK businesses investing in R&D. Stories of fraud by a few bad apples should not taint genuine claimants and the advisors who support them. Those who diligently set out their R&D and costings, explaining clearly the scientific or technological advance which underpins the claim, should hold their heads high.