Delays to R&D Tax Credit Processing Times as HMRC Investigate Irregular Claims

HMRC have advised they have paused some Research & Development Tax Credit payments whilst they investigate some irregular claims. They have confirmed that the majority of claims are unaffected but there will be some delays to their usual processing times to ensure they prevent abuse of these valuable tax incentives. R&D claimants are being requested not to chase their claims via the HMRC helpline or mailbox and instead request agents check their company’s online account to see the status of their claim.

It was first announced in the 2021 Autumn Budget that measures would be taken to target abuse of R&D Tax Credits and improve compliance. Whilst the main changes won’t come into effect until 2023, HMRC have already started clamping down on the problem.

In 2019/20 there was an estimated level of error and fraud of £311 million and it was clear that action needed to be taken. In the past, many companies have gotten away with over-claiming (whether intentionally or through a lack of knowledge/understanding) but R&D Tax Credit claims are now well and truly under HMRC’s microscope.

Whilst you can’t avoid a HMRC investigation if your claim is randomly selected for checking, it’s more important than ever to ensure your claims are handled by someone with specialist knowledge and experience. At R&D Funding Group we pride ourselves on the ability to ensure our clients’ R&D Tax Credits claims are maximised, but we have always advocated the need to ensure claims are compliant. We want our clients to be awarded the full amount they are entitled to but this has always been relative to the qualifying activities undertaken and costs incurred, in strict adherence to HMRC guidelines. If claims are compliant then there is no cause for concern should HMRC want to look more closely at your claims.

Are you confident your R&D Tax Credit claims are compliant? If you’re unsure or have any questions, please contact us for a free consultation.