Due to the increasing level of fraudulent R&D tax relief claims HMRC paused all R&D repayments at the end of April. They have since re-started issuing repayments, however these are now subject to additional checks.
HMRC previously aimed to process R&D claims within 28 days. With the additional checks and the backlog created from pausing repayments HMRC have now increased their standard processing time to 40 days.
HMRC expect to process 80% of claims within 40 days by the end of August.
What You Can Do to Avoid Further Delays
Whilst it is not possible to speed up the process there are things which can be done to ensure your claim is not subject to additional delays.
It is essential that all boxes relating to the R&D claim have been completed accurately on the CT600 and CT600L, if required. If any boxes are incomplete this may lead to delays, or in the worst-case scenario the claim will not be processed by HMRC.
The company bank details should be included on the CT600 when a repayment is expected. Cheques take significantly longer to issue and will not be issued for large repayments.
All R&D claims prepared by us include a detailed technical report which is submitted to HMRC, helping to reduce delays in processing the claim. The report aims to answer any queries HMRC may have as to the technical aspects of the projects, and how the projects meet the definition of R&D. This should help HMRC to verify the claim without the need to ask for more information, which can cause significant delays to any repayment due.
HMRC Requests for Further Information
HMRC have now changed their policy from pay now, ask later to asking questions before making any repayments. As a result, they have written to over 1,000 claimants to request further information. These requests have been made to claimants who are deemed to be high risk. HMRC have not issued any further details as to the type of claims, or claimants they consider to be high risk.
What to do if You Receive a Letter
It can be tempting to ignore HMRC letters, however this is the worst thing you can do. Receiving a letter does not necessarily mean that there is an issue with your claim, as tax returns may be selected at random for enquiry.
It is important to reply to HMRC in a timely manner, as failure to answer HMRC’s queries may result in your claim being amended or rejected.
We can assist with HMRC enquiries regardless of who has prepared your R&D claim. We liaise with HMRC on your behalf, ensuring that any queries they have are answered with full technical details, in a language in which they can understand.
If you have received a letter from HMRC regarding your R&D claim contact us on 028 9040 6295 to discuss how we can help.