Architects! Has HMRC’s R&D crackdown caught your firm out?

Design excellence lies at the core of every successful architecture practice, driving innovation and project efficiency across the project lifecycle. As the profession embraces emerging materials, processes and technologies while navigating complex regulatory landscapes and budget constraints, the need for innovative solutions has never been more paramount. 

UK architects are globally renowned for their forward-thinking approach. To sustain this reputation, many firms have relied on government incentives, particularly R&D tax credits, as a crucial source of funding to fuel ongoing innovation. These incentives play a pivotal role in supporting groundbreaking research and development efforts, especially as the architecture sector emerges from the challenges posed by the pandemic. 

However, to continue receiving these generous benefits, architecture firms must adapt to new conditions in claiming R&D tax relief. HMRC’s intensified focus, aimed at combatting perceived fraud and error, has resulted in greater scrutiny. A newly formed dedicated anti-abuse team comprising hundreds of compliance inspectors is now conducting checks on over 20% of R&D claims. Architecture firms, in particular, have found themselves facing these rigorous and lengthy enquiries, with HMRC increasingly prone to opening further enquiries into earlier, ostensibly settled, claims.  

Moreover, despite recent tribunals ruling in favour of organisations like architecture firms that work directly for clients, HMRC persist in denying claims on subcontracted or client-subsidised R&D. With the new R&D regime introduced in April 2024, the criteria for claiming incentives on contracted-out R&D are becoming more subjective and potentially more daunting. 

Considering these developments, it’s imperative for firms to reassess their approach to R&D claim preparation and support. Partnering with an experienced adviser can provide invaluable guidance in navigating the more complex regulations and securing optimised benefits.  

At Moore Kingston Smith, we have a team of experts that can help you. Our dedicated R&D tax team guides architecture firms through claim preparation, presenting supporting information correctly to HMRC. We also help defend claims under enquiry by HMRC. As a multidisciplinary team comprising technical specialists and tax professionals, we support clients throughout the claims process.  

Don’t let the evolving landscape of R&D incentives hinder your firm’s innovative endeavours. Whether you are preparing your next R&D submission, responding to a compliance check on a previous submission, or would just like an independent, fresh perspective on what remains a generous incentive, contact us now. As a regulated member of professional organisations such as ICAEW and CIOT, we’re a trusted long-term adviser.