When claiming for R&D tax relief it is helpful to understand the claims processing timescale and to know what to expect in terms of getting refunds or tax credits. HMRC has a policy of dealing with small and medium sized companies’ R&D repayable tax claims within 28 days. In 95% of cases, HMRC does usually achieve this time scale. Some claimants have found that claims take longer than this, however. Here we explain why this can be the case.

 

One situation that can lead to a delay in tax credits being paid is HMRC is not comfortable with the claim. In the case that a claim is considered to be possibly incorrect then it will seek more information by opening an enquiry. In the majority of cases this will be done within 30 days of HMRC’s receipt of the claim.

 

To avoid the likelihood of a delay in the claim process as a result of an enquiry, it is best to make sure that HMRC has all of the information it needs to make a decision in the first place. This primarily includes a summary of the costs borne in carrying out the R&D (making sure that only allowable costs are claimed for) and an explanation of a number of your R&D projects explaining why they were considered R&D, utilising the HMRC definitions and guidance. While HMRC does not mandate the sending of these two pieces of information currently, not sending them could delay the claim or arouse suspicion in certain cases. Sending them helps show evidence of a robust and well thought out claim that meets the HMRC requirements.

A common mistake that leads to delays in processing of R&D tax relief is that of not providing bank details. When bank details for the account that HMRC is to pay any tax credit or refunds into is not provided, this naturally leads to a delay, as HMRC do not know what to do with the money. This may seem like a silly problem but it happens far more often than you might think. If you do your own business taxes, make sure you send the details in to HMRC, and if your accountant does them, make sure they know where you want any refunds sent. The good news is that this sort of delay is easily remedied by providing the right information in the first place.

 

Using a reputable R&D Tax Relief Advisor also has the potential to speed up a claim processing time. While no figures are available on this, it stands to reason that if HMRC has had a good experience with an Advisor over a long period of time, and if that Advisor’s claims are always reliable and stand up to scrutiny, then they are less likely to lead to problems and delays. This may be a step worth considering, especially for companies that are new to the R&D Tax Relief claiming process.