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R&D tax relief processing times – An update

29 October 2019

Business Tax

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We recently discussed HMRC’s ambitious goal of working through their back log of claims by the end of September 2019; with the level of claims being received this appeared to be a mammoth task.

However, we are now pleased to announce that HMRC appear to have achieved their goal and the processing times for both R&D Tax Credits and RDEC claims have been reduced to their original estimate of up to 28 days.

Why did a backlog develop?

Put simply increasing volumes of claims: levels have been increasing year on year since their inception nearly 20 years ago and this past year looks set to be the biggest yet. More information about the number of claims received since the schemes implementation can be found in the latest statistics from HMRC which were published on 10 October 2019

Who claims R&D and RDEC?

Whilst the relief has to be for projects that directly have an advance in science or technology as their goal, this scope extends to more than just the traditional “white-lab-coated-scientists” and may include software development, engineering or building projects, improvements in manufacturing process amongst others.

This year’s statistics have shown an increase in the amount of small and medium businesses claiming R&D and also Patent Box relief, but the majority of claims are put forward by larger companies. Regardless of size these reliefs can provide a valuable injection of capital.

Changes to the way claims are processed

HMRC also recently announced that responsibility for SME R&D claims has now been taken over by the department of Business Taxation and Operations and will remain with them for the foreseeable future (rather than the specialist R&D units).

For updates on the processing times for R&D claims whether a large business or an SME please visit our dedicated page. Should you have any questions please do not hesitate to contact us on the details listed above or by submitting an enquiry.