Speedy processing at HMRC!
An update from HMRC.
Through times of uncertainty it's nice to share some positive news.
As ever, we're working hard at YesTax with both our partners and clients to proactively identify qualifying business activity and file tax relief claims to secure valuable cash injections for businesses. The good news is that HMRC seem to be doing the same! HMRC's typical processing times for an R&D claim, once submitted, is between 6 and 8 weeks, but recently we've had claims processed within as little as 5 business days. What great news!
In fact, HMRC have recently provided the following statement by way of an update which we wanted to share.
R&D Returns & Payments
“At a time of pressure on HMRC operational resources, our first priority is to maintain our published aim of clearing 95% of SME tax credit claims within 28 days and we have implemented contingency plans to support this, including applying extra resource to the work. Currently we are meeting this aim”.
“We have received requests for guidance in respect of filing or amendment dates. We appreciate the operational difficulties customers are facing and we will be sympathetic to those facing problems. For example, time limits for claims are set in legislation so that claims for R&D payable tax credit and Research & Development Expenditure Tax Credit should be received by HMRC within 12 months of the statutory filing date of the company’s tax return. If a customer is unable to meet that time limit, they should submit the claim as soon as possible and we may be able to accept a late claim”.
Can the “Going concern” requirement in the SME scheme be set aside?
The going concern condition is a statutory requirement so it is one that HMRC cannot overlook. The condition requires the claimant company to have been a going concern according to the last published accounts. In many cases these will have been prepared before the effects of COVID-19 so that there should not be any issue caused by the going concern requirement.
Are new Government support schemes introduced in response to the Coronavirus, such as CBILs, State aids or subsidies? Will they affect a company’s ability to make a claim under the SME scheme?
The Government has notified CBILS as a State aid under the European Commission’s new Temporary Framework for COVID-19. The measure is a fully notified aid, so the restriction on receipt of other State aid (s1138(1)(a) CTA 2009) potentially applies, if the CBILS relates specifically to the company’s R&D expenditure [on a project] rather than being intended more generally to support the company. This will depend on the facts.
Budget 2020 announcements
Following the 2020 Budget earlier this month, the following measures were announced which relate to R&D reliefs.
PAYE Cap
Following consultation last year, the introduction of the PAYE cap on the payable tax credit in the SME R&D schemes will be delayed until 1 April 2021. This allows time for further consultation on the design of the cap.
Expanding Scope of Qualifying Costs
The government will also consult on whether expenditure on data and cloud computing should qualify for R&D tax credits. The consultation will be published in due course.
Off payroll
You may be aware the Government announced on 17th March 2020 that it was delaying the introduction of the off-payroll working reform from April 2020 to April 2021. As a result, the consequential amendments in relation to R&D legislation will not be made until April 2021. More details can be found here; https://www.gov.uk/guidance/april-2020-changes-to-off-payroll-working-for-clients
COVID 19 support for business
For more information regarding the wider measures set out by the Chancellor to help businesses through this period of disruption caused by COVID-19 please see https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
ACT NOW
As ever, if you or your clients are involved in;
- bespoke client work, or
- projects that are not 'one-size-fits-all', then let's talk.
Perhaps you are eligible for R&D tax credits? It costs nothing to ask the question and we'd be pleased to help.
To all our existing clients; we're happy to get to work on your next claim straight away and get those payments to you faster! We’ll be in touch.