By Janine McNeill, Assistant Manager, Tax at Grant Thornton

HMRC is currently experiencing significant delays in processing Research and Development (R&D) SME tax credit claims and Research and Development Expenditure Credit (RDEC) claims.

It has recently announced a recovery plan which has a target date of 30 September 2019 to get through the backlog, with current statistics showing HMRC is currently processing SME R&D tax credit claims submitted in May 2019 and RDEC claims submitted as far back as December 2018.

Businesses have raised concerns that claims they submitted in late 2018 have still not been processed and this is having an impact on their resources to continue with R&D activities.

Responding to these concerns, HMRC has provided some further details on its recovery plan.

The plan includes having additional staff to process the R&D claims, which will cover both SME R&D and RDEC claims, as well as moving the processing of the claims to colleagues in the customer services group, who have a wider pool of staff and will be able to cope better with any seasonal fluctuations in the demand for processing.

As a result, it aims to have all current claims up to date by 30 September 2019.

HMRC will continue to provide updates through the R&D Consultative Committee regarding expected turnaround times.

HMRC guidance states that its approach for handling R&D SME tax credit claims would previously have been to deal with them within 28 days, where it would have either paid the payable tax credit or contacted the company regarding the claim.

An SME making an R&D claim can expect all corporation tax issues to be dealt with by the R&D specialist unit.

It should be noted that claims made by a larger company, or companies that form part of a group should expect the processing of the claim to take slightly longer than the standard turnaround time, with the specialist R&D unit being responsible for any aspect of the R&D claim.

So, what does this mean for businesses considering making an R&D claim?

With many companies having a September or December year end, an influx of further R&D claims is expected.

Businesses should be proactive in engaging with their specialist R&D consultants now to ensure that their claims are submitted ahead of their corporation tax return submission deadline, thus ensuring the cash flow benefits of the incentives are attained as soon as possible.

Please take all the above delays into consideration when planning future cash flow for your business.

For further information or advice, Janine McNeill can be contacted at

Grant Thornton (NI) LLP specialises in audit, tax and advisory services and was ranked by Experian as the Number 1 deal adviser in Northern Ireland in 2018