Why are there delays?
Many R&D advisers have noted HMRC’s current delay in processing R&D claims. HMRC has concerns that the R&D tax relief schemes are being abused and they are grappling with how best to deploy their resource to prevent this. Recently the ICAEW highlighted (here) that some repayments were being stopped whilst HMRC investigated suspicious activity. This is a departure from what we’ve experienced previously, where HMRC tended to process claims now and check later, similarly to the rest of the self-assessment tax regime.
R&D relief is designed to encourage companies to innovate and Rishi Sunak stresses that this is a fundamental part of his strategy to help the UK grow. However, HMRC is caught in the difficult position of trying to encourage companies to claim the relief but ensuring that they prevent any abuse of the relief.
Most claims will escape this stringent treatment, but they won’t escape the knock-on effect of delays to the usual processing times. Where delay is experienced, taxpayers and agents are advised not to contact HMRC and accept that there may be some delays in processing claims.
What can you do?
However, there are things that can help HMRC process a claim quicker, such as completing the CT600 corporate tax return correctly and submitting additional information to support a claim. There is no prescribed format for this additional information, but generally, it should be sufficient to allow HMRC to understand what advance was being sought in each project and the uncertainty that needed to be resolved. It is also beneficial to explain the methodology of calculating costs, for example, how staff time was calculated to support not only the underlying activity but the quantum of a claim.
Partnering with an R&D Specialist, such as Easy R&D, can help improve claims processing by utilising their expertise to uncover all the costs of an R&D project, but also to ensure that HMRC have everything they need to ensure the claim is settled as quickly as possible.
Do you need help with an R&D claim?
If you need any help with submitting an R&D claim, you can contact our experts on 0845 606 9632 or email firstname.lastname@example.org. Alongside our specialist R&D partner, Easy R&D, we’ll be able to support you with advising on eligible R&D expenditure and the subsequent claim.
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