HMRC aim to make payments within 28 days for SMEs claiming research and development (R&D) tax credits. Corporation Tax repayments can be much quicker, and sometimes come through within a week of your claim being filed. Large company claims (under the RDEC incentive) usually take longer to pay due to the greater complexity of their business.
R&D tax credit repayment time
HMRC expect to be able to make R&D tax credit payments to you within 28 days of your SME claim being submitted. However, the R&D tax credit repayment time does not include the 10 days it can take for the money to arrive in your bank account once your R&D claim has been approved. So overall, it could take around 35 days in total from the submission of your claim to receiving your R&D tax credit.
Find out more about R&D tax credit processing times during COVID 19.
SMEs and R&D tax credit payment timeline
Corporation Tax refunds generally take less time to process than your R&D tax credit repayment. This is because they can be issued through an automatic process that doesn’t require an HMRC inspector’s direct intervention to make the payment.
If there are any complexities to the payment — such as refunds generated by carrying back losses — the claim might require manual intervention as HMRC’s automated systems won’t always recognise them. This, in turn, can influence R&D tax credit payment processing times.
The speed at which HMRC pay out your R&D claim can be affected by seasonal availability and internal workloads. In particular, payments during the peak periods for company year-ends (March, September and December), may take longer due to the volume of payments being processed. For more detail, you might like to read more about how long it takes for HMRC to review an R&D tax credit claim.
As the latest HMRC R&D tax credits statistics show, the number of claims being made continues to rise. In the past, this has had a knock-on impact on processing times. But HMRC has worked hard to get on top of the situation and the situation is improving.
Large companies and R&D tax credit payment timescales
These factors also affect claims made by large companies. In general, large company RDEC claims take longer to process, often because they are part of a more complex Corporation Tax return. The process can also be prolonged if the company has other specialist areas, such as transfer-pricing, that need to be considered. But again, this depends on the company, the complexity of its tax requirements, and what kind of relationship the company has with HMRC.
Here at ForrestBrown, we benefit from policy-level insight into HMRC’s workings and are in constant contact with them about our clients’ claims.
If you’d like advice on a claim you’ve made, or are thinking about making, please do get in touch. We’re always happy to help.
Have a question for our team?
It can be complicated to submit an R&D tax credit claim to HMRC’s exacting standards.
Get in touch with our team of chartered tax advisers, chartered accountants, lawyers, sector specialists, former HMRC inspectors and quality assurance experts to access expert guidance for your claims.