In an ideal world, HMRC aspires for an R&D tax claim turnaround of 28 days. But as is often the case, the reality diverges from the ideal.

To their credit, the tax authority has been upfront about the problems. In a statement the Revenue attributed the delays to a mix of the scheme’s popularity, a lack of resources and HMRC’s duty to ensure payments are correct

“HMRC reviews tens of thousands of claims for R&D tax relief each year. Claims for relief are carefully scrutinised irrespective of the size or structure of an applicant.

“We are sorry that some businesses have not received payments as quickly as we would like and staff have been recruited to help with processing.”

The delays, according to The Chartered Institute of Taxation (CIOT), peaked in July, amounting to 95 days for R&D tax credit claims and over 200 days for RDEC (the research and development expenditure credit for large companies).

Alongside the promise to recruit extra staff, the CIOT said, HMRC has also committed to:

• Not differentiating between R&D tax credits and RDEC claims for processing purposes and are aiming to get up to date on all claims.
• Moving claims processing to colleagues in customer services group who, with a wider pool of staff, will be able to cope better with seasonal fluctuations in demand.
• Continue to provide updates through the R&D Consultative Committee regarding their current position and expected turnaround times.

Since the peak in July, signs are that the situation is improving. Turnarounds for R&D tax credits and RDEC claims have come down, according to a CIOT technical officer who said:

“The situation is slowly improving, although there is still some way to go, particularly for RDEC claims. But we hope that HMRC will get back on top of things by the end of September.” As far as the CIOT was aware, the delays were primarily down to a lack of resources.

 

Noel Guilford