The CIOT wrote to HMRC in June to express our concern at the current position regarding processing times of claims for R&D tax credits and RDEC claims by HMRC. The problems that the significant delays currently being experienced are causing has been raised with us by a number of our members.
The most recently published processing times at the time of writing (for Monday 8 July) are:
- R&D tax credits – processing claims submitted on 4 April 2019 (thus taking 95 days)
- RDEC claims – processing claims submitted on 20 December 2018 (thus taking 200 days)
Clearly these processing times are much longer than the service level which HMRC aspires to for payable tax credits of 28 days.
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 has 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.
HMRC says it is taking action to reduce the delays in both R&D payable tax credits and RDEC claims. HMRC has redeployed staff from other work areas and recruited new staff to speed up processing and payments.
In our letter we said that, understandably, the delays in processing claims are causing a significant amount of unnecessary contact between taxpayers, advisers and HMRC. We suggested that it would be helpful if HMRC could publish the expected turnaround times more widely than the current email circulation to members of the R&D Consultative Committee (RDCC) so that calls simply to chase the progress of claims can be minimised. HMRC has responded saying that it will continue to keep agents updated on the latest position through the weekly update email to RDCC members, as well as updated “auto response” messages to emails sent in to the R&D mailbox to inform customers and manage expectations.
HMRC notes that by bringing in wider resources to the R&D team, it may appear that some claims are being processed ahead of others. This is due to training requirements and HMRC will strive to deliver a fair and balanced service dealing wherever possible with claims in date order.
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. To assist us with this, we would like to hear from members regarding their experiences of dealing with R&D claims and, in particular, processing times. Please e mail us at technical [at] ciot.org.uk.