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 usually take longer to pay due to the greater complexity of their business.
HMRC expect to be able to make R&D tax credit payments to you within 28 days of your SME claim being submitted. However, this does not include the 10 days it can take for the money to arrive in your bank account once the 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.
SMEs and R&D tax credit payment timescales
Corporation Tax refunds generally take less time to process. 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 affect payment processing times.
As with most businesses, the speed at which HMRC pay out your 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 a claim.
The last HMRC R&D tax credits statistics 2018 showed a significant increase in the number of claims being made which has had a knock-on impact on processing times. HMRC are working hard to process claims as quickly as possible, but this increase has resulted in a delay to processing times.
Large companies and R&D tax credit payment timescales
These factors also affect claims made by large companies. In general, large-company R&D tax credit 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.