The end of HMRC’s volume compliance approach: what it means for R&D claims

March 2026 was a momentous month for those of us working in R&D compliance. At the R&D Communication Forum (RDCF), HMRC announced the end of its controversial volume compliance approach run by its Individuals and Small Business Compliance (ISBC) Campaigns & Projects team. It also confirmed that it would instead focus its R&D compliance work within its Wealthy and Mid-sized Business Compliance (WMBC) Directorate, reinstating its pre-2022 position whereby WMBC handled all R&D enquiries.

These changes mark a significant change in approach, which all R&D claimants should be aware of and prepared for. Here, we set out the key considerations for businesses already claiming or intending to claim the relief.

Background to the changes

The volume compliance approach was first introduced by ISBC for R&D claims in 2022 to tackle increasingly high levels of error and fraud. In contrast to WMBC, it adopted a targeted approach, focussing its efforts on sectors in which HMRC believed – rightly or wrongly – it was unlikely that qualifying R&D was taking place. In aiming to reach as wide an audience as possible, it created efficiencies by not appointing a single caseworker to manage the case, instead relying on a collaborative approach reflected in an anonymised sign off on correspondence: “R&D Tax Credits Compliance Team”.

Additionally, ISBC was reluctant to accept calls from or meetings with a company’s competent professional, instead relying on a desk-based approach to reviewing claims. The net effect was an increase in the number of enquiries, but a corresponding slow-down in the amount of time it was taking to resolve them.

Invariably this approach drew criticism from across the industry, including the Chartered Institute of Taxation (CIOT), which in 2024 said: “R&D tax credits are intended to support the UK’s ‘push for growth’, but frustrating enquiries resulting in the rejection of legitimate claims are undermining this. Businesses are being put off claiming relief to which they are entitled.”

Renewed focus on WMBC

A change was perhaps inevitable and, following a sustained fall in the level of error and fraud in R&D from its 2022 peak, the RDCF signaled that it would refocus its compliance efforts within WMBC. It confirmed that existing cases open with its Campaigns and Projects team would be worked to closure and that new claims would be handled by WMBC’s Incentives & Reliefs teams, utilising its “more specialist expertise”. It added: “We will be undertaking enquiries into more ‘complex risks’”.

What does HMRC’s change of approach mean for my claim?

Since no further information has been provided on what “complex risk” means, it is unclear what the changes will mean in practice, particularly since much will rest on the individual caseworker’s approach. It is possible that complex risks could include claims involving relatively untested elements of the regime such as the new restrictions on overseas R&D or the new statutory definition of contracted-out R&D. Alternatively, they might relate to businesses in a certain sector. Or something else entirely. We simply don’t know.

What we do know is that risk hasn’t gone away. HMRC enquiries still exist, albeit they will be administered in a different way. For any business claiming – or thinking of claiming – R&D tax relief, it is important to protect yourself from risk. The best way to do this is by partnering with a specialist R&D adviser that can accurately capture your costs and quantify your claim.

Similarly, where you have already prepared a claim in-house and find yourself subject to a HMRC compliance check, then the best approach is to seek expert support to help resolve the enquiry. A specialist adviser will be able to advise on the best course of action and can help mitigate any costs or penalties.

How ForrestBrown can help

As the market-leading R&D tax relief consultancy, ForrestBrown is skilled at optimising claims while protecting them from risk. We draw on the real-world expertise of our technical experts to help validate your claim, while our tax experts ensure that its scope is accurate. There have been many changes in the R&D landscape in recent years, and our team know how to navigate them.

If you have been claiming with another provider or preparing claims yourself and are unsure whether your claim is adequately protected from risk, we can assess your most recent claim, offer advice, and amend it, as needed.

We also have considerable expertise in handling HMRC enquiries, typically supporting those who find themselves subject to a compliance check after having prepared the claim themselves or with another provider. Here, we draw on our multi-skilled disputes team – including an ex-HMRC inspector – who can advise you on your claim, take on the correspondence with HMRC and help find a resolution.