HMRC have shared that most R&D tax credit claims are “genuine and will not be affected”, however that the investigation may cause delays in the processing of your tax return to “prevent abuse of the relief”. Based on previous statements given by HMRC in regards to the abuse of R&D, it is likely that claims made for the SME cash credit will be particularly scrutinised.
Although the majority of claims will not be subjected to an investigation, claimants should prepare for a delay in receiving their tax relief payments. Companies will therefore need to consider the financial impacts that a delayed tax relief payment may have on their company’s cash flow and profit-making.
Moreover, HMRC have requested that claimants do not contact the R&D helpline if their payment seems to be taking longer than usual to come through. They have however recommended that agents or companies review their online accounts to monitor the progress and status of their clients’ R&D tax relief claims.
We have a specialist team of R&D advisors who have an in-depth knowledge of the R& D scheme. On average, our enquiry rate by HMRC is less than 1%, meaning over 99% of claims are approved on submission.
From our knowledge, many businesses are failing to provide accurate details of the technological advancements in a project and how they managed to overcome any technological uncertainties. Creating a compelling technical narrative can help overcome these challenges. By ensuring a sufficient understanding of your business activities and costs, we can work with you to identify qualifying activities and expenditures to maximise the tax benefits available. We recommend having an efficient record-keeping process throughout the R&D claims process to support your claims, should HMRC wish to raise any queries
Partner - Corporate and R&D Tax