We asked HMRC how much of the increase in the cost of R&D tax reliefs was down to abuse. HMRC said monitoring was difficult because over time R&D tax reliefs had become increasingly generous and thus an increase in claims would be expected. It also said that claims have consistently exceeded forecasts, and it had therefore tried to understand the reasons why. We asked HMRC about the nature of fraud it had identified and whether there were trends in particular types. In response, HMRC focused on the role of advisers who, it said, approach businesses and suggest, incorrectly, that some expenditure can be recharacterised as R&D to get tax relief. HMRC explained that when it challenges a claim, it can find the adviser has gone and the business does not know a great deal about the rationale for the claim. HMRC confirmed that it had a watchlist of advisers that it was worried about. It said the list would be of great benefit to it when claimants are required to disclose who helped them with their claim.26