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April 8th 2020

Coronavirus: HMRC update on R&D Tax Credits

Here's a short summary of what they have said:

  • a commitment to try to "continue to" clear 95% of claims within 28 days (which they say they are currently meeting);
  • they will be sympathetic to claims that are made late due to Covid 19 related operational problems; if a company is unable to meet the time limit they are advised to submit a claim as soon as practicable (the normal due date is within 12 months of the corporation tax return filing date - in practice that usually means R&D claims have to be filed within 24 months of the financial year end to which the claim relates);
  • they are considering whether to offset claims to payable SME credit against a company's other tax liabilities - but say they have no discretion to do that under the RDEC Scheme;
  • going concern is a major consideration for many companies due to the impacts of Covid 19; the rules of the R&D Tax Credit Schemes require that the claimant should be a going concern based on the last published accounts; HMRC will be monitoring this area closely;
  • CBILS is a "notified State aid", which may impact a claimant's eligibility for R&D Tax Credits where the loan relates to the company's R&D expenditure on a specific project or projects (rather than being intended more generally to support the company);
  • the PAYE cap on the SME Scheme payable tax credit will not be introduced until April 2021; and
  • the Government will consult on whether expenditure on data and cloud computing should qualify for R&D Tax Credits.

The full update can be found on the ICAS website.

If you have questions about R&D Tax Credits or require help preparing and submitting claims, contact us today.

Find out more about our corporation tax services.

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