Once a research and development (R&D) tax claim has been submitted to HMRC, payments are aimed to be paid within 40 days for SMEs claiming research and development (R&D) tax credits.
Claims made under the RDEC scheme usually take longer to process due to the greater complexity involved within the scheme.
R&D tax payment processing
Under the SME scheme, HMRC aims to process the payments within 40 days of submission to HMRC, although HMRC aims to process 95% of claims within 28 days.
If any information is missing or inaccurate then this would delay the processing period.
What can cause a delay in processing an R&D tax payment? Here a few reasons:
- R&D tax credit payments can take longer than corporation tax refunds due to the extra manual work required by HMRC.
- Carrying back losses may require manual work by HMRC so additional steps will be required
- HMRC’s workload can affect payment. HMRC is typically busy in March, September and December due to the popular year ends of companies.
- Claims under RDEC are usually more complex so take longer to process
The process can also be delayed even with SME companies claiming under the RDEC scheme if grants or state aid is involved.
Ultimately, the payment processing time is influenced by multiple factors involving the resources at HMRC, the complexity of the R&D claim and the type of relief the company has claimed.
