There are currently considerable delays in HMRC’s processing of Research and Development (R&D) claims. Expected processing time of 4 to 6 weeks has turned into 4 to 6 months.
Davis Grant are clearly not alone in identifying this significant issue, and indeed only last week, following the ICAEW’s Tax Faculty raising the issue with HMRC, the following response was received from HMRC:
A combination of recent staff losses and very high volumes of claims has meant that we have been unable to turn around claims as quickly as we would like.
We’re constantly reviewing our processes to manage peaks, and we’re currently taking the following actions to reduce delays:
– A recovery plan is in place to bring payable tax credits back on track, while tackling the backlog of RDEC paymentsHMRC Response
– We have redeployed staff from other work areas and recruited new staff to speed up processing and payments
– We are committed to keeping agents updated on the latest position, with a weekly update to Research and Development Consultative Committee members. We have also introduced updated ‘auto response’ messaging to emails sent to the R&D mailbox, to keep our customers informed.
We have helped our clients to get over £3m in cash from the Government in the form of R&D Tax Credits. With over £3.5 billion awarded last year – they can be a vital cash injection for your business.
It is for this reason that we work with all our clients to ensure accounts are prepared and subsequent R&D claims submitted to HMRC as close to their year end as possible. Indeed, with some clients with crucial R&D claims, we will work with them on their claim even before the year end.
Where R&D receipts are especially vital, we work with our clients on their cash flow forecasting. This includes incorporating our Grand Vista cash flow software to help manage and mitigate any cash flow impact.