HMRC recovery plans for processing R&D claims

A previous TAXwire news item provided a response from HMRC on the steps it is taking to deal with delays to processing of Research and Development (R&D) claims that are affecting both SME R&D relief and R&D expenditure credit (RDEC) claims.

HMRC has now provided further detail about its recovery plan which has a target of being up to date by 30 September 2019.

‘HMRC’s 28 day aim applies to R&D tax credits rather than RDEC. However we are undertaking to bring both payments into that 28 day turnaround time. In order to do that we are taking a number of steps:

  • Additional staff are in the process of being moved onto the processing of R&D claims, covering both R&D tax credits and RDEC claims
  • We will not be differentiating between R&D tax credits and RDEC claims for processing purposes and will be aiming to get up to date on all claims
  • We are in the process of moving claims processing to colleagues in Customer Services Group who, with a wider pool of staff will be able to cope better with seasonal fluctuations in demand.

As a result of these steps, and due to the inclusion of RDEC as well as payable tax credit claims, we are aiming for the overall position being up to date on both R&D tax credits and RDEC claims by 30 September 2019.

This will depend on a number of factors including how soon we can get people trained to undertake the work (which has already started), any complications that emerge from the work on hand and also how many new claims are submitted to HMRC. The popularity of the scheme continues to grow and with it the number of claims received. Therefore we cannot give you a complete guarantee on this but it is certainly our aim and ambition.

While there has not been a significant improvement in turnaround times since last week, I trust you and your members will appreciate that new staff need to be trained to deal with R&D payment processing. To do this we need to deploy experienced processing staff onto training. Given our aim to bring the processing up to date by 30 September you can expect to see greater improvements in the next few weeks.’