Some R&D tax credit payments suspended by HMRC

Jennifer Lee, 26 May 2022

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The ICAEW has reported that HMRC has suspended or delayed payment of some R&D tax credit claims due to 'irregularities'. 

HMRC has not given details of the suspected abuse it’s seeking to mitigate or the investigative work it’s undertaking. However, they have said some payments have been stopped.

What does this mean?

The R&D credit system is known to have been open to abuse, therefore it’s suspected that HMRC will be cracking down on fraudulent claims or claims where no technical report has been submitted to evidence the R&D work undertaken.

Whilst it appears that the majority of R&D claims are not going to face additional scrutiny, there may be delays in the normal processing and payment timescales. Companies claiming R&D relief may need to consider the impact a delayed credit may have on cashflow over the coming months.

What do you need to be aware of?

The R&D legislation is complex, it’s critical that any claim for R&D tax relief is supported by a technical report which adequately evidences that the claim qualifies for relief under the legislation.

The calculation of the claim also needs particular care, as calculating the claim value incorrectly could result in HMRC opening an enquiry or levying penalties.

Who should you contact?

According to the ICAEW, HMRC has requested that claimants do not contact the R&D helpline to chase claims. They have recommended that agents or companies review their online accounts to monitor progress.

How can we help?

At Lubbock Fine we have a team of tax specialists with significant experience in claiming R&D tax relief.

If you would like assistance with making a claim, please get in touch with Robert Hoad, Corporate Tax Director (roberthoad@lubbockfine.co.uk) or Jennifer Lee, Corporate Tax Manager (jenniferlee@lubbockfine.co.uk).

If your company’s R&D claim payment gets suspended, or HMRC open a formal enquiry into your R&D claim then you may need assistance with dealing with HMRC. Please get in contact with our Tax Dispute and Resolution Director Graham Caddock (grahamcaddock@lubbockfine.co.uk).

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