R&D Tax Credit payment delay update

The Chartered Institute of Taxation (CIOT) has been asked by HMRC to share the message below about the recent pausing of Research & Development Tax Credit (RDTC) payments with their members.

HMRC say:

"We previously notified agents that we have paused some Research & Development Tax Credit (RDTC) payments while we investigate an increase in irregular claims. Our investigations are continuing, but we are now able to provide an update. 

To prevent abuse of the relief we will be enhancing our extensive compliance checks. These additional checks will mean our standard processing times will increase.  

For the vast majority of claims, we will aim to either pay the payable tax credit or contact you regarding the claim within 40 days. It is our ambition to return to our standard 28-day processing times as soon as we can. Our gov.uk guidance will be updated shortly. 

We wanted to share this update to notify legitimate claimants that their RDTC payments will take longer to be processed. We appreciate agents’ and claimants’ patience while we handle these claims and continue to offer the guidance below: 

• To help us process your R&D payment quickly, please ensure you have completed all entries on the R&D section of your Corporation Tax return (CT600 form).  Submitting additional information to support the claim, such as the R&D report will help HMRC process the claim quicker.  Review the latest guidance on completing your CT600 form on GOV.UK. If you submit a claim that is incorrect, inflated or fraudulent, then you may be liable to a penalty. Read HMRC: standards for agents
• We ask R&D claimants to bear with us and kindly ask them not to contact the R&D helpline/mailbox to chase their claims. We also ask you not to contact any HMRC official about a claim. Instead, agents should check the company’s online account to check the status of their claim. 

We will continue to share updates when we have further information."

Useful guides on this topic

Research & Development Tax Reliefs: At a glance
What is Research and Development (R&D) relief? How to claim R&D relief? How does small company R&D relief work? Can individuals claim R&D relief?

R&D Tax Relief: Overview
What is R&D Relief? How does it work? Why does the size of the company matter? What is sub-contracted R&D? How do I write an R&D Report?

New R&D CT600 supplementary page from April 2021
HMRC have published a draft CT600 supplementary page to be used in respect of Research and Development claims from 1 April 2021.

Source: CIOT RDTC