, although it is thought much of the cash has been paid out in error rather than fraud.
Businesses employing less than 500 staff are able to claim tax credits if the firm is working on innovative projects within science and technology, and have been performing work to overcome scientific or technological uncertainty. The SME Research and Development tax relief scheme has faced significant issues with erroneous and fraudulent payments.
However, HMRC estimates now place the cost of incorrect payments at 24.4 per cent, over four times the previously estimated amount after a random enquiry programme to audit the scheme. According to the worst case scenario estimates, the true rate of incorrect payments could be even higher at 33.9 per cent.
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