The investigation by HM Revenue and Customs sparked morning raids yesterday, officials revealed today.
More than 30 officers from HMRC searched three residential and one business address during morning raids in the West Midlands.
The suspected fraud, had it been successful, would have been worth an estimated £300 million over five years.
Computers and business records were seized during the operation.
Martin Brown, assistant director of Fraud Investigation Service, HMRC, said: “While an attack on the tax system is often thought victimless, it isn’t. It means that the public lose out on vital funds for essential services. Any abuse of the R&D tax relief scheme is defrauding a system put in place to help legitimate businesses grow and develop.
“We will continue our work to tackle any fraud or attempted fraud, to ensure taxes are directed to where they should be and not into the pockets of criminals. No one is beyond our reach.
“If anyone has information about tax fraud, please contact the HMRC 24 hour Hotline on 0800 59 5000.”
The men, one aged 40 from Leamington Spa, one aged 44 from Birmingham and another aged 49 from Coventry, were interviewed by HMRC and have been released on bail. Investigations are continuing.