Outcomes from the first R&D Communication Forum (RDCF)

The R&D Communication Forum (RDCF) is an annual meeting between HMRC and R&D tax credit agents, serving as a platform for discussing the Research and Development (R&D) tax relief scheme. The forum allows HMRC to communicate upcoming changes, provide operational updates, and answer questions from agents and the public. Each year, detailed notes are released following the session.

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The session that took place yesterday covered a wide range of policy, operational, and compliance developments affecting R&D tax credit claims.

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^{The agenda for the session included:}

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1. Opening remarks: An introduction from Fiona Hay, who started her new role this week as Head of the Customer Compliance Group
2. Policy update: Guidance and Northern Ireland
3. ERIS state aid reporting: ERIS State Aid reporting requirements for the Northern Ireland and Advanced Assurance pilot
4. Compliance update: David Tarelli, Will Innes
5. Agent registration: Benjamin Jones
6. HM Treasury update: Sam Crawley
7. Q&A

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2. Policy Update – Guidance and Northern Ireland

Mariam and David presented a number of legislative clarifications regarding the Finance Bill and the application of the overseas expenditure restriction.

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Finance Bill clarification:

• Confirmation that overseas restriction does apply to Northern Ireland. Previous legislation was not entirely clear on this point.
• However, later in the session it was stated that this restriction does not apply to ERIS, meaning further clarification will be required in the final RDCF notes.

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State Aid Reporting Requirements (Northern Ireland):

From January 2026, claimants in Northern Ireland must comply with new State Aid reporting requirements. Minor changes have been introduced to the Additional Information Form (AIF) to support this.

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Typographical Errors in the AIF:

At the previous RDCF, HMRC advised that it would accept agent representations where typographical errors occurred in Unique Taxpayer References (UTRs) in Additional Information Forms (AIFs).

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Going forward, HMRC will accept representations for errors involving:

• Unique Taxpayer References (UTRs)
• Accounting Period End (APE) dates

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This applies in circumstances whereby the claim would otherwise be valid if not for the typo error. The easement covers both the AIF and the Claim Notification Form (CNF), and the CIRD guidance will be updated accordingly. In the interim period, agents can contact the R&D rights of representation mailbox.

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3. ERIS state Aid reporting requirements for the NI and Advanced Assurance (AA) pilot

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The forum also covered developments relating to ERIS State Aid reporting and the AA pilot.

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AA Pilot:

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The Advanced Assurance (AA) pilot's criteria have been extended and are now available for all SMEs. Under the pilot, companies can seek assurance on up to two of the following criteria:

• Whether the project qualifies as R&D
• Whether overseas expenditure qualifies for relief
• Which party can claim relief where expenditure is contracted out
• Whether the claim qualifies for PAYE/NICs cap.

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The pilot will go live in May, with guidance to be published shortly. HMRC noted that while they will aim to respond promptly, this will be difficult, and they may limit participation numbers accordingly.

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ERIS state Aid reporting requirements for the Northern Ireland:

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Companies in NI may claim ERIS for overseas expenditure.

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Claimants must:

• Declare State Aid received within the last three years on the AIF
• Confirm the sector split of the aid, including:
  • Fisheries
  • Agriculture
  • Goods
  • Electricity
• Confirm that State Aid limits have not been exceeded

The AIF was updated in July 2025 to accommodate these requirements.

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Notably, there appeared to be some inconsistency in the presentation: while it was stated that overseas expenditure restrictions apply to Northern Ireland ERIS claimants, the slides indicated that ERIS can be claimed for overseas expenditure. This point is expected to be clarified in the final RDCF notes.

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Calculating state aid:

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When considering the state aid amount from ERIS, it should be calculated as the difference between what would be eligible under the Merged scheme and ERIS. Additionally, the EU has introduced the eAIR register, a centralised system for recording State Aid and de minimis aid that will be publicly available.

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4. Compliance Update

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HMRC provided several operational updates regarding compliance activity and enquiry handling.

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Claim trends:

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HMRC reported that:

• Overall claim numbers have decreased
• SME claims are decreasing
• RDEC claims are increasing
• Claims are on average a higher value

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HMRC stated it continues to meet its processing targets during peak times.

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Improvements to customer communication:

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HMRC is working to improve the management of customer-facing mailboxes, focusing on:

• Better triage and tracking of incoming items
• Improving the timeliness and quality of responses

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Currently, there is joint responsibility for this via compliance and operational teams. Actions are taken, but this is sometimes communicated through generic letter responses rather than bespoke emails. HMRC expects improvements to be visible from April onwards.

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Further changes are also planned to enable more direct communication with customers and agents, particularly in cases where HMRC intends to open an enquiry but has not yet formally done so. The date of implementation for this is TBC.

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Alternative Dispute Resolution (ADR):

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Demand for ADR has reduced:

• Applications are down by 1/3 compared to last year.
• Average take up time sits at four weeks.
• Subcontracted and subsidised expenditure: HMRC confirmed that over 300 enquiries were opened relating to subcontracted and subsidised expenditure issues. All open cases were contacted by June 2025.

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Discontinuation of Campaigns and Projects (C&P):

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A major structural change discussed during the forum was the C&P team standing down. The Campaigns and Projects team follows a volume-based approach to compliance checks, so taxpayers do not have a named point of contact throughout an enquiry.

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Key points include:

• Fewer/larger claims: in the process of refocusing R&D compliance work back into WMBC and moving away from C&P work.
• HMRC note the expansion of the WMBC R&D team to ensure sufficient compliance coverage to manage the risks they have identified.

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From a practical perspective:

• C&P will no longer open cases
• Existing C&P cases will largely continue to be worked until closure
• However, some cases may transfer to WMBC as staff move across departments to minimise the disruption to customer service.
• All cases in C&P will continue to receive support from WMBC until all are closed.
• New teams in WMBC will follow existing ways of working related to case ownership.

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The shift reflects the evolving risk landscape:

• Claims are larger and more complex
• As a result, HMRC will utilise more detailed enquiries into complex risks, supported by specialised knowledge and expertise within the I&R (Innovation & Reliefs) teams.

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5. AI Updates

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HMRC discussed both the internal use of AI and the expectations for agents' use of AI.

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HMRC’s Use of AI:

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All R&D caseworkers now have access to Microsoft Co-Pilot.

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However, HMRC emphasised that:

• AI is used adhering to ethical guidelines
• Internal teams have been training appropriately on AI use as well as on the risks of AI. The expectation is that AI can support with drafting letters, but this must have human oversight, with it being reviewed by case workers before sharing, publishing or making any decision.

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If agents believe that letters or decisions appear to be entirely AI-generated, HMRC encourages them to raise this.

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This is in line with the government’s AI roadmap, and this frees up staff time to focus on compliance work.

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R&D Summary tool:

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HMRC has also tested an AI-powered R&D summary tool that can summarise key information from an R&D report or an AIF. The tool provides caseworkers with a high-level overview of the claim before reviewing detailed information. HMRC emphasised that this is in line with AI ethics guidelines.  

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During a pilot, testing has so far been limited to cases where casework had already been completed.

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The intention is to:

• Improve efficiency
• Free up time to allow technical specialists to focus on complex cases

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HMRC confirmed it will take a cautious approach before wider rollout.

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AI use by agents:

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HMRC has published general guidance on the use of software in submissions to HMRC. Agents using AI tools must:

• Adhere to the process outlined
• Ensure transparency on tool use
• Appropriate use of AI
• Maintain human oversight
• Use AI responsibly and ethically

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6. Agent registration

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HMRC confirmed the upcoming introduction of Tax Adviser Registration, designed to raise standards and tackle non-compliance within the sector. HMRC note that there will be no formal regulation at this time.

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Key details include:

• This applies to all businesses that provide tax services for clients and interact with HMRC.
• Implementation date will be 18th May 2026
• Registration will occur at the business level
• HMRC will conduct checks on individuals who hold meaningful operational and tax advisory leadership roles within those businesses.
• Applications will be completed online, and HMRC has invested £36 million in implementing the system.
• Agents who already hold an Agent Services Account (ASA) will not need to register again, as they will automatically be transferred into the system.
• HMRC will publish new guidance on adviser registration requirements ahead of implementation.

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7. HM Treasury update

HM Treasury confirmed that its key priorities are:

• Maintaining the generosity of RDEC and ERIS relief
• Ensuring companies continue to benefit from eligible R&D activity
• Providing certainty for businesses planning investment after a period of uncertainty.

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Feedback from key stakeholders on entrepreneurship highlighted the importance of R&D incentives for start-ups and venture capital investment, reinforcing the government’s focus on maintaining a stable R&D tax environment after a period of policy change.

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At RCK, we will continue to closely monitor any changes and ensure our clients are informed of them and how they will affect their claims.  

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