Recently, the Institute of Chartered Accountants in England and Wales announced the fact that HMRC has decided to halt payments on some R&D tax credit claims whilst it prioritises reducing fraud and abuse of the scheme. The expected result of this announcement is delayed to the usual claim processing and HMRC payout times.
This blog will cover how the slowdown impacts you and how you can make the best of the current circumstances.
Thinking about applying for a HMRC payout?
Although this news might have muddied the waters, don’t delay your claim. Simply put, the longer you wait to make a claim, the more people will be ahead of you in the backlog.
As the number of Research & Development Tax Credit Claims continues to rise, it’s no surprise that the number of mistakes businesses make is also growing. HMRC have hired an additional 100 Inspectors to help approve and look into possible fraud. If you need help with your claim, this article can help get you started, 10 Mistakes Companies Make When Creating an R&D Claim.
Ready to start your R&D claim?
The new reality is that your future claim is likely to face a delay before the HMRC payout. Substantial delays may be faced by claimants, but there are still some things you can do to put your claim in the best possible shape.
1. Partner with the right advisors
Unfortunately, there’s nothing that anyone can do about the inevitable slowdown in processing times. But there are steps you can take to make sure that your claim is in the strongest possible position, ensuring that it’s handled as speedily as possible whilst still able to stand up to the rigour of HMRC’s scrutiny.
If partnering with professional advisors they should be able to be as responsive as you need them to be. There’s no point delaying things even longer by instructing an accountancy team to help you that can’t move at your speed. When discussing the initial scope of your claim, you could ask how they intend to work, for example using technology to ensure swift data collection.
You should also check the credentials of any professionals you hire. Are they experts in their field? What experience do they have in handling R&D claims in your line of business? These things can be a point of difference when looking to make an efficient and effective claim.
2. HMRC follow up service
Professional advisors can sometimes draw a line at preparing and submitting a claim. This leaves you in an awkward position if HMRC requires more supporting information or challenges the claim in any other way. Make sure your advisor is offering a follow up service, meaning they don’t stop working until your claim is complete and both you and HMRC are happy.
3. Don’t delay starting your claim
You can capture your costs as soon as you know them, (making sure none are missed), and record the technical details before you forget them. This makes sure any claim is accurate and ready for your year end. Working on the details incrementally in this way is the most efficient way of constructing your claim and collecting all the supporting documentation.
Already submitted a claim?
If you’ve already submitted a claim then unfortunately you’re likely to be impacted by the predicted slowdown. Once you submit a claim, it’s in the hands of the Gods, (HMRC), and there’s not really anything you can do to speed things up.
At this stage, if you know that your claim wasn't as accurate as it could have been or if it was processed by a non specialist you’re more than likely to face a delay. You may face follow up questions or even an enquiry. These delays to your HMRC payout could be as much as 6 months.
Increased compliance checks
HMRC’s level of scrutiny isn’t going anywhere. If anything, they’ll only get more stringent in their work to eliminate fraud and inefficiencies in the R&D tax credit schemes. You can ensure you stay on the right side of compliance by partnering with the correct advisors and being transparent about your costs and other financial data when preparing claims.
If your company is looking to take advantage of R&D Tax Credits, we’re here to help. With £30 million+ in claims processed and a team of experienced advisers, we make sure your business receives the credits it deserves.
We’ll handle the full R&D tax claim process, from identifying eligible R&D expenses and filing the right paperwork, to making sure your credit is accurately applied.
And, our services don’t end there. Our market leading, full stack finance function gives you access to all the management information and reporting tools that you need to drive your success.
Through our motivated and personalised service, we can help you achieve your business goals. Talk to us today to see how we can help you.
Want to learn more about maximising your R&D Claim?
Speak to one of our R&D Tax Specialists to find out how we can build a successful claim for your business.Let's talk