Knowledgebank: HMRC

HMRC, R&D Tax Relief, Research and Development

HMRC is a government tax department that raises income from different companies through taxation. It includes out many fields including child benefit payments, tax credits, implementation of minimum wages, gathering national insurance contributions and collection of income tax payments. Many people do not actually understand these activities and ask many questions regarding HMRC. Below are some of the questions and answers.

Does HMRC take long to review an R&D tax relief claim?

The time it takes for HMRC to review a claim depends on how complex your account structure is. Though it aims at processing all the claims within 28 days, if your account’s structure is complex, it may take longer than that. The nature of your claim will also determine how long it takes a review to become successful. The scope of your company will also determine how long it will take. This goes for SMEs and large companies.


For SMEs, HMRC aims at processing the reviews within 28 days. Though the speed may also depend on the load of work at HMRC and the availability of resources, in most cases, you can expect a review within 28 days.

Large companies

Though the review processes depend on the same circumstances as in SMEs, large companies sometimes wait longer for the processing of their reviews. This is mainly because of the complexity of corporation tax returns and other specialist areas in the company.

Can HMRC withhold R&D tax relief claim?

Until they are satisfied that everything is in order, yes, HMRC has the power to withhold any repayments of research and development tax credits. The activities that have to meet their standards are the research and development activities in place and supporting methodology used to expense these activities. If there are any doubts, HMRC may open an inquiry and this will obviously delay the 28-day processing procedure. During the enquiry, you can still claim some part-payment that correctly reflects amounts agreed upon within your claim.

If I make an incorrect claim, will HMRC penalise me?

If there is an error in research and development tax relief claim, then HMRC will charge a penalty. The penalty severity will however depend on several circumstances. “Was there attention and due care taken during the preparation of the claim?” What circumstances surrounded the R&D claim?” Answering these questions correctly will determine the amount of penalty charged. If your company took reasonable care, then there is no penalty charge.

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