# HMRC doesn't ask if the work happened. It asks if you can prove it happened when you say it did.

Since August 2023, HMRC requires an Additional Information Form declaring when each R&D project began, ended and who led it. Reports written retrospectively from memory or AI output do not satisfy the test, and the first criminal prosecution of an accountancy firm landed in 2025. immut anchors a SHA-256 hash of each technical record to the XRP Ledger at the moment it is created, giving every R&D activity log, decision record and notebook entry independently verifiable, contemporaneous proof.

## How much scrutiny do R&D claims now attract?

- Approximately 20% of claims are now checked, up from approximately 1% pre-2023.
- Approximately 300 dedicated R&D inspectors have been hired since 2022.
- HMRC's internal estimate of annual R&D fraud is £481M.
- The assessment window for deliberate behaviour is 20 years.

The AIF has been mandatory since 1 August 2023. Every R&D claim must be accompanied by a structured Additional Information Form, submitted before the claim is processed; claims without an AIF are rejected. The penalty for careless claims is up to 30% of tax understated; for deliberate behaviour, up to 100%, with a 20-year discovery window.

## What does "contemporaneous" mean in law?

"Contemporaneous" is not a preference; it is the statutory concept. Eight instruments across UK, US and international law ask the same question: can you prove this evidence was created at the time you say it was?

- **UK, HMRC Additional Information Form (AIF).** Mandatory since 8 August 2023 for every R&D claim. Per project it requires: the field of science or technology and the advance sought; the uncertainties identified; how and when those uncertainties were overcome, and by whom; and what work was done and when. HMRC's guidance is explicit that it expects contemporaneous evidence of a project taking place, not retrospective explanations from a competent professional.
- **UK, HMRC CIRD81300 / GfC3 (October 2023).** Expected records: project charts, drawings, designs, test results, photos of prototypes, minutes of meetings, email exchanges, plus a written copy of the competent professional's opinion with supporting reasoning, kept from the beginning of the project. Invoices and bank statements appear nowhere in that primary list.
- **UK, Criminal Finances Act 2017, s.45.** Strict corporate liability for failure to prevent facilitation of tax evasion. The defence is reasonable prevention procedures, and the evidence of those procedures must itself be contemporaneous. Bennett Verby Ltd is the first corporate prosecution under these provisions; trial September 2027, Manchester Crown Court.
- **UK, CTA 2009, Part 13: the two-test framework.** Test 1 (expenditure): was qualifying expenditure incurred? Financial records satisfy this. Test 2 (qualifying activity): was the expenditure on work that constitutes R&D, an advance through resolution of scientific or technological uncertainty? No invoice satisfies Test 2. The tribunal authorities Hadee, Flame Tree and Tills Plus all confirm: financial records present, claims denied on Test 2.
- **US, IRC §41 Research Credit.** A four-part test (qualified purpose, technological in nature, elimination of uncertainty, process of experimentation), all four substantiated with contemporaneous documentation. The IRS position is categorical: retrospective reconstruction is not acceptable. The R&D credit has been on the IRS Dirty Dozen list of tax scams every year since 2019.
- **US Tax Court, Betz v. Commissioner.** "Trial testimony is not only insufficient to substantiate qualified research activity without further contemporaneous documentation, but is also insufficient to dispute contrary evidence in contemporaneous documentation."
- **US 7th Circuit, Little Sandy Coal Company v. Commissioner (2023).** R&D credits disallowed in full. The failure was evidentiary, not substantive: the research may have been real, but the taxpayer had failed to retain sufficient records.
- **Ireland (Revenue), Canada (CRA), Australia (AusIndustry).** The same standard globally. AusIndustry publishes it explicitly: records must be created and maintained during the income year, not retrospectively.

## We have invoices and bank statements. Isn't that enough?

So does every denied claim. HMRC applies two sequential tests. Invoices, bank statements, payroll records and subcontractor contracts satisfy Test 1 (was the money spent?), and HMRC broadly accepts financial records there. Test 2 asks whether it was R&D in the statutory sense: the advance, the uncertainty, how and when it was overcome, and by whom. No invoice answers any of those questions. HMRC's published guidance: "HMRC want to see contemporaneous evidence of a project taking place, not simply retrospective explanations from a competent professional."

The forensic problem underneath: an authentic document written in 2023 is forensically indistinguishable from one written in 2027 and backdated. The creation date on a Word file can be changed in seconds; cloud timestamps record when a file was saved, not when the work was done.

## Which cases show the pattern?

Across UK and US cases, the research may or may not have been real; the record was not adequate, and the consequence followed the evidence gap.

- **Bennett Verby Ltd (UK, CFA 2017 s.45, August 2025): criminal prosecution.** First-ever corporate prosecution of an accountancy firm under the Criminal Finances Act failure-to-prevent offences. Alleged facilitation of approximately £16M in fraudulent R&D claims. Trial September 2027, Manchester Crown Court.
- **Green Jellyfish / Kirby & Haslam (UK, HMRC, September 2024): raids, 11 arrests.** Two Norwich R&D consultancies, over £100M in claims. Allegations include technical narratives written retrospectively by staff with no relevant scientific background.
- **Betz v. Commissioner (US Tax Court): credit denied in full.** Oral testimony on what happened; no contemporaneous record of when.
- **Little Sandy Coal v. Commissioner (US 7th Circuit, 2023): credit denied in full.** General assertions and reconstructed project summaries did not discharge the burden.
- **Hadee Engineering Co Ltd v HMRC (UKFTT 497 (TC), 2020): 7 of 8 projects denied.** Financial records existed; the contemporaneous technical trail linking spend to qualifying activity did not.
- **AHK Recruitment Ltd v HMRC (UKFTT 232 (TC), 2020): claim denied.** The tribunal found it "remarkable" that no evidence was produced from anyone contemporaneously involved in the project.
- **Flame Tree Publishing Ltd v HMRC (UKFTT 349 (TC), 2024): £266,644 claim denied.** No time recording system; time allocations derived from retrospective discussions between directors.
- **Tills Plus Ltd v HMRC (UKFTT 614 (TC), 2024): £665,000 claim denied.** The tribunal accepted the expenditure evidence and rejected the qualifying-activity evidence: the claim failed on Test 2 despite passing Test 1.

## Why does this matter to R&D advisory firms, not just claimants?

Criminal Finances Act 2017 s.45 creates strict corporate liability: if any person associated with your firm criminally facilitates tax evasion, your firm commits an offence unless it can evidence reasonable prevention procedures, meaning training records, supervision logs and claim review sign-offs dated before submission. If those records exist only in editable Word files on a shared drive, the defence is weaker than if the same records were cryptographically anchored when created. The first question a forensic expert will ask: can you confirm these documents existed in this form at the date they bear? Every R&D advisory firm today is in the same evidentiary position Bennett Verby was in before August 2025.

## Don't time-tracking, Jira or SharePoint already document R&D?

They record what someone said they did; none can prove it was recorded at the time, on a ledger a regulator can independently verify.

- **Time-tracking software (Harvest, Toggl, Clockify)** records who billed time to which project code, not what technical work was done or when uncertainty was resolved.
- **Project management tools (Jira, Notion, Confluence, ClickUp)**: task descriptions and statuses can be edited after the fact; timestamps record when the platform received a save event, not when the decision or experiment occurred.
- **Document storage (SharePoint, Google Drive, OneDrive)**: version history records platform modifications, file metadata is editable, and timestamps can be gamed by uploading a re-dated file.
- **AI-generated technical narratives (GPT-4, Claude, Gemini)**: a narrative written in 2026 about work allegedly done in 2024 is inherently retrospective, regardless of accuracy. HMRC is explicit that retrospective explanations do not satisfy the contemporaneity test.

## How does immut work?

1. **Only the hash is recorded.** immut generates a SHA-256 fingerprint of your file; your technical documentation, lab notes and project records are not stored by immut.
2. **Hash anchored to the XRP Ledger.** Once written to the public ledger, no party can alter or delete it; the timestamp is the ledger's own consensus time.
3. **Court-ready certificate issued.** Hash, XRPL transaction ID, ledger sequence number and UTC timestamp, independently verifiable by HMRC, a tribunal, or your own counsel.
4. **Proof outlives immut.** The record remains verifiable even if immut ceased to exist.

Blockchain-anchored certificates are already accepted as legal evidence in 88 countries across 171 jurisdictions, including under EU Regulation 2025/2531 (eIDAS-2), US v. Sterlingov (2024), the China Supreme People's Court blockchain-evidence ruling (2018, over 1,400 subsequent cases), and AZ Factory v. Valeria Moda (Paris, 2025).

## The question to ask yourself

If HMRC asked you to prove the qualifying work happened when you say it did, not just that you paid for it, could you?

## Links

- Live page: https://www.immut.io/evidence/rd-tax
- Developer docs: https://www.immut.io/docs
- For AI agents: https://www.immut.io/ai-agents