Research and Development tax credit payments on hold

Research and Development tax credit payments on hold

HMRC have paused Research and Development tax credit payments. Investigations are also now underway into irregular claims for the tax relief.

HMRC says that most of the claims are genuine and that the investigations should have no impact. However, delays are now expected when processing R&D claims, following the investigations.

Claimants should not contact the R&D helpline/mailbox to chase their research and development tax credit payments. HMRC will provide updates via the regular Monday agent email, along with an update next week.

research and development tax credits
Businesses are being asked to complete all R&D entries on their corporation tax returns. This will allow for more efficient processing of claims. More information, such as an R&D report, will also help to speed up the claims processing time.
HMRC is also reminding people that penalties may occur if a claim is inaccurate, inflated or fraudulent.

An HMRC annual report analysed by an accountancy firm in 2021, found that fraudulent claims totaled £303m. This is an increase of £30m when compared to 2020.

R&D Reform

The Chancellor announced his plans to reform research and development tax credits last year. They will begin in April 2023.

The reform will see an expansion of qualifying expenditure to include data and cloud costs.

It will also include support for refocusing innovation within the UK. Efforts will also increase to improve compliance and target abuse.

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More information on research and development tax credits can be found on our R&D page.

To find out more about eligibility check out our article ‘R&D Tax Relief – Does your business qualify?’