R&D tax credit aspect query: what the Revenue letter means now

What most people still call an aspect query, advisers now read as a Level 2 Risk Review under Revenue's Code of Practice for Revenue Compliance Interventions. It examines one risk, or a small number of risks, on a return. The letter starts a 28-day clock, and one of your options closes on the date printed on the letter, not when the review begins.

“Aspect query” is the old name

The phrase does not appear in the current Code of Practice, in force since 1 May 2022, or in the April 2026 edition of Revenue's R&D tax credit manual. Advisers, Grant Thornton among them, treat the old aspect query as what is now a Level 2 Risk Review; Revenue publishes no mapping of its own. Revenue's description still uses the word: a Risk Review “may focus on a particular aspect or issue on a return” (Code, paragraph 1.3.3.1).

What matters more than the name is this: under the current Code, the Risk Review letter itself closes a route to a lower penalty, which is covered below.

Three levels, and they are not a sequence

The Code sorts Revenue's compliance interventions, other than Customs, into three levels (paragraph 1.1.1).

A Level 1 contact is not an inquiry for the purposes of section 1077F, which is why you can still correct things on your own terms (paragraph 1.2). A Risk Review and an Audit are both Level 2. The Audit is used “where there is a greater level of perceived risk” (paragraph 1.3.3.2). Level 3 is a Revenue Investigation, opened where Revenue believes serious tax or duty evasion may have occurred or a Revenue offence may have been committed (paragraph 1.4.1).

The levels are not steps. In the Code's words, “Revenue may initiate an intervention at any level of the framework in response to a perceived risk. This may arise without any previous intervention at a lower level in relation to the taxpayer concerned” (paragraph 1.1). A Risk Review can be your first contact from Revenue.

The 28-day clock

The letter is a notification of a Level 2 compliance intervention, sent to the company and to its agent on record, if there is one (paragraph 1.3.4). It names it as a Risk Review, sets out the tax and period in scope and the focus, and confirms it is an inquiry under section 1077F. It asks for the information “by return within 28 days” (paragraph 3.1.2).

• The date on the letter. From this date an unprompted qualifying disclosure is no longer available.
• Within 21 days. If you intend to make a prompted qualifying disclosure and need time to prepare it, you must tell Revenue in writing within 21 days of the notification. You can then ask for up to 60 calendar days, counted from that notice (paragraph 2.10.1).
• Day 28. The review is deemed to have started 28 days after the date of the letter, whether or not you have replied. Unless Revenue has agreed the extra time above and confirmed in writing when it expires, a prompted qualifying disclosure must be made before then. In the Code's words, if you do not respond within 28 days “the inquiry is deemed to have commenced and the opportunity to make a qualifying disclosure is closed” (paragraph 3.1.2). In exceptional circumstances a different start date can be agreed (paragraph 1.3.4).

Most Risk Reviews are desk based and run by correspondence (paragraphs 3.1.1 and 3.1.2). One can be escalated to an Audit if more comes to light. You then get 28 days' notice of the audit and a new chance to make a prompted disclosure, but only for the additional taxes or periods it adds, not the ones already under review (paragraph 3.1.3).

Whatever the focus of the review, there is only one opportunity to make a qualifying disclosure for a given tax and period, and it has to deal with everything for that tax and period, not just the point under review (paragraph 3.1.3). For an R&D claim, that tax is corporation tax.

Why the date on the letter matters

Penalties under section 1077F depend on the behaviour behind the error, whether you made a qualifying disclosure, and whether you cooperated fully. For careless behaviour without significant consequences, with full cooperation, the Code sets the penalty at 3% with an unprompted qualifying disclosure and 10% with a prompted one (paragraph 2.13). With no qualifying disclosure it is 15% with full cooperation and 20% without (paragraph 2.14). Where the tax default is more than 15% of the original liability, it counts as having significant consequences, and on a first disclosure those two figures become 5% and 20%. Interest applies in every case.

So the letter is not a neutral request for information. On the date it is issued, the 3% route closes.

What is different about an R&D claim

The review runs under the same Code of Practice as any other tax. As with any other corporation tax relief, no supporting documentation is filed with the return; Revenue requests it later to verify the claim (Tax and Duty Manual Part 29-02-03, section 8.6.2). What is specific to R&D is what Revenue examines, and one procedure:

• The two tests. The science test asks whether the activity is qualifying R&D. The accounting test asks whether its costs were properly tracked and accounted for. Records must be kept to satisfy both (Tax and Duty Manual Part 29-02-03, section 8).
• The suggested file layout. Appendix 3 of the same manual lists, per project, the records Revenue would expect to see. Our guide to Revenue's R&D tax credit file layout covers what it asks for and what it does not require.
• An outside expert. Revenue can bring in an independent technical expert under section 766(7), and tells the company who it proposes first. The company may object where there would be a genuine conflict of interest, with a right of appeal to the Tax Appeals Commission (Tax and Duty Manual Part 29-02-03, section 10). Revenue's notification letter also gives 30 days to show that disclosure to the expert could prejudice the business, or that the expert's area of expertise does not fit the work under review (Tax and Duty Manual Part 29-02-05).

If the review runs on

The Code sets no fixed length for a Risk Review. It does give you a lever. If you have answered everything within a reasonable time and the intervention is still open a month later, you can ask Revenue for its status. Revenue will say what remains outstanding and “will, where possible, provide an indicative timeframe for conclusion”. And: “If there is no clear cause for the delay in finalising the intervention a taxpayer's entitlements to credits or refunds of tax shall not be delayed or withheld” (paragraph 4.8). That protects against an unexplained delay; it does not oblige Revenue to pay a credit that is itself under review.