Explore HMRC’s role in R&D tax relief, including compliance requirements, claim assessments, and how to manage enquiries to safeguard your claim and reduce risk.
What are HMRC’s processing times for a R&D claim?
HMRC aims to process 85% of SME R&D claims within 40 days, though times can vary due to claim complexity, staffing levels, year-end submissions, risk factors, or the amount of supporting documentation provided. Delays may also occur during peak periods, so staying updated with HMRC guidance helps manage expectations for receiving tax credits.
How will I receive my R&D tax credit?
How you receive R&D tax credits depends on your scheme, tax position, and preferences. SME claims may reduce taxable profits or provide cash if loss-making, while RDEC benefits appear as taxable income. Profitability, group positions, and HMRC obligations also affect outcomes, and businesses can sometimes choose cash or tax reductions to optimise cash flow.
Will HMRC penalise incorrect claims?
If HMRC identifies an error in your R&D claim, a penalty may be issued to ensure tax returns are prepared carefully. Penalties can apply if HMRC adjusts your return and believes you are at fault, potentially requiring repayment of tax or credits. Understanding the enquiry process and maintaining thorough, accurate documentation helps minimise the risk of penalties.
