R&D claims need to be submitted early

HMRC is warning businesses to submit research and development (R&D) claims as soon as possible to avoid a delay in receiving payments between December and January

There are some periods during the year, linked to taxpayer year ends, where the number of claims increases significantly, leading to possible payment details.

Expenditure on R&D by UK businesses grew by £900m to £26.9bn in 2020 despite the pandemic; the increase of 3.5% was similar to recent year-on-year growth, Office for National Statistics figures show.

Between December 2021 and January 2022, HMRC expects to be dealing with higher volumes of R&D claims. The tax authority said it was committed to processing 95% of R&D tax credit claims submitted online within 28 days of receipt, but could take longer during the peak period.

The 28-day processing aim does not apply to:

• claims not filed by the electronic portal; and
• claims where BACS details have been omitted or incorrectly supplied.

Businesses are also advised to not chase the progress of claims due to pressure on HMRC services.

For an update on the status of any R&D claim, taxpayers should check the company’s online account to determine whether the claim has been processed. Payments processed will be visible on the company’s online account within 24 hours, however they may be subject to a further security check before they are issued.

In 2020, total UK business employment in R&D grew by 18,000 to 283,000 full-time equivalent positions, an increase of 6.8% since 2019.

Contact us if you need advice about R&D