Corporate transparency and register reform - CIOT response

2 Aug 2019

The current processing times are much longer than the service level which HMRC aspires to for payable R&D tax credits of 28 days. Although the 28 day turnaround applies only to R&D tax credits, and not also to RDEC claims, HMRC recognises that they should be aiming to deal with all R&D claims within a reasonable timescale, unless they have concerns regarding the validity of the payments or claims.

We asked HMRC to explain the reasons for the delays and what is being done to address the problem, suggesting that it would be useful for them to manage expectations by providing some reassurance that what appears to be a clear lack of sufficient resource within the R&D team is being addressed. We said that it would also be helpful for taxpayers and advisers to know when it is expected that the situation will improve and that processing times will begin to come down.

HMRC have responded, acknowledging the delays currently being experienced, saying that this is due to a combination of recent staff losses and extremely high volumes of claims being submitted to HMRC (in part as a result of the popularity of the scheme, which continues to grow, and with it the numbers of claims).

HMRC says they are taking action to reduce the delays in both R&D payable tax credits and RDEC claims and are currently taking the following 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;

HMRC will not be differentiating between R&D tax credits and RDEC claims for processing purposes and are aiming to get up to date on all claims;

HMRC 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; and

as before, HMRC will continue to provide updates through the R&D Consultative Committee regarding their current position and expected turnaround times.

As a result of these steps HMRC are aiming for an overall position of being up to date (that is to say being as close as possible to a 28 day turnaround time) on both R&D tax credits and RDEC claims by 30 September 2019. We understand that it is not possible for HMRC to give a guarantee in respect of achieving this, as it will depend on a number of factors, including how soon HMRC can get people trained to undertake the work, any complications that emerge from the claims already submitted and also how much new work comes in. But we welcome HMRC‚ s assurance that being up to date by 30 September is their aim and ambition.

We will continue to monitor the position and hope to see an improvement in processing times as a result of the action HMRC is taking in the near future. HMRC expect to see improvements in the amount of RDEC and R&D claims being processed each week to accelerate through August, as the additional staff being trained join the team.

Technical Team