What Happens to My R&D Claim If My Advisor Goes Bust or Loses HMRC Registration?

Several R&D tax adviser firms have entered insolvency proceedings or had their HMRC agent registration revoked since 2023, as HMRC intensified its scrutiny of the adviser market under the Agent Compliance programme. If your R&D claim is with one of these firms, the RDEC relief you received or are waiting for sits in an uncertain position until you take action. The company, not the adviser, is always the taxpayer in HMRC's eyes.

The Core Rule: the Company Is Always the Taxpayer

An R&D adviser acts as your agent under a 64-8 authorisation. They can file your company tax return, correspond with HMRC, and respond to enquiries on your behalf. But everything they do is legally attributed to the company, not the adviser.

This means:

• If the adviser submitted an inflated claim, HMRC will seek repayment from your company, plus interest running from the date the relief was paid.
• If the adviser missed a deadline, your company bears the consequence.
• If the adviser did not disclose material facts, your company's return is the one that contains the omission.

You may have a separate civil claim against the adviser for professional negligence or breach of contract. But that is a matter between you and the adviser, not between you and HMRC. Your tax position and HMRC's claim on you exist independently of any recovery you may make from the adviser.

What Happens to a Claim That Is Already Paid

If HMRC paid out an R&D credit or reduced your corporation tax bill based on a claim that is later found to be inaccurate, HMRC will raise an assessment to recover the amount. This applies whether the inaccuracy was introduced by an adviser without your knowledge or whether you signed off on a return that contained errors.

HMRC's Compliance Handbook at CH81120 distinguishes between different categories of inaccuracy: careless, deliberate, and concealed. Penalties are applied on a sliding scale based on which category applies and whether the taxpayer disclosed the inaccuracy proactively. Where the inaccuracy was introduced by a third-party adviser rather than by the company itself, and the company took reasonable care, the penalty may be reduced to nil. But the underlying tax liability remains.

If You Are Mid-Enquiry When the Adviser Fails

An HMRC R&D enquiry does not pause because your adviser has gone bust or lost registration. The enquiry clock keeps running. If there is an outstanding Schedule 36 information notice with a 30-day response deadline, that deadline does not move because your adviser is insolvent.

Your immediate steps if you are mid-enquiry and your adviser has failed:

1. Check for any outstanding HMRC deadlines, particularly information notice response dates or appeal windows.
2. Contact HMRC's agent services helpline and notify them that your previous agent authorisation is no longer valid. HMRC will then correspond with your company directly until you appoint a new authorised agent.
3. Request HMRC provide copies of all correspondence sent to the adviser, including the enquiry opening letter, any information notices, and any preliminary conclusions.
4. Appoint a new R&D specialist adviser and submit a new 64-8 as quickly as possible.

If a deadline is imminent and you cannot appoint a new adviser in time, you or a company director can correspond with HMRC directly. HMRC will accept responses from the company itself where no agent is authorised. Write to HMRC, explain the situation with your previous adviser, and request a reasonable extension to respond while you appoint a replacement.

Getting Your Documents Back

Client documents are not the property of the adviser firm. They belong to the client. If the adviser has entered formal insolvency, an insolvency practitioner has been appointed to manage the estate. Contact the insolvency practitioner and formally request all documents relating to your company's tax affairs.

Documents you need to retrieve:

• The original R&D claim as submitted, including the technical narratives and cost schedules.
• The Additional Information Form submitted to HMRC.
• All HMRC correspondence, including the enquiry opening letter if one was received.
• Any draft technical reports or working papers prepared by the adviser.
• The engagement letter and fee agreement.

HMRC can also provide a copy of the filed company tax return and the AIF on request. Contact HMRC's Corporation Tax helpline and ask for copies of the filed return and associated R&D documents. This provides an independent record of what was actually submitted.

Deregistration vs Insolvency: the Practical Difference

HMRC agent deregistration and insolvency are different events with slightly different practical consequences.

Deregistration. HMRC can revoke an agent's ability to act for clients where the agent has been found to have submitted dishonest or persistently inaccurate returns. The agent loses the ability to file future returns but their past filings are not automatically invalidated. HMRC will write to affected clients when a firm is deregistered, though the process is not always immediate.

Insolvency. If the adviser firm enters administration or liquidation, it ceases to operate. The 64-8 authorisation technically remains on HMRC's records until you cancel it, but the firm cannot act. You should cancel the authorisation and appoint a new agent promptly.

In either case, the practical effect for an ongoing claim or enquiry is the same: you need a new authorised agent, and you need your documents.

Preventing the Problem at Outset

The best defence against adviser failure affecting your R&D claims is to maintain your own records independently. Your company should hold copies of every document submitted to HMRC in connection with an R&D claim, not rely on the adviser to retain them.

When selecting an adviser, check that they carry professional indemnity insurance, are members of a professional body such as the CIOT or ICAEW, and are registered with HMRC under the agent services account. Our adviser comparison guide sets out what to look for.

If you have existing R&D claims under enquiry or paid relief that you are uncertain about, a free specialist assessment can review the submitted documents and tell you whether the claim is likely to withstand HMRC scrutiny. That is a better position to be in before HMRC contacts you than after. Read about qualifying expenditure categories to understand what a properly constructed claim should contain.